Student loan scams existed before President Biden made his executive order regarding federal student loan forgiveness. However, with the latest announcement of widespread student loan forgiveness, the number of scams has increased, significantly. It is important that borrowers know the warning signs to avoid being scammed.
Scammers know that people are desperate to escape their student loan obligations, which is why so many people fall prey to their tactics. Scammers will attempt to gain access to the borrower’s personal and financial information. In an effort to steal personal and banking information, the scammers ask you to fill out a form to see if you qualify for loan forgiveness.
It is important that student loan borrowers know the federal government will not reach out to borrowers individually by email or text regarding the loan forgiveness program. It is up to the borrower to apply for loan forgiveness. If a borrower receives an email, phone call, or text message from someone claiming to be contacting them regarding student loan forgiveness, this should be an immediate red flag.
If the communication includes statements that encourage the borrower to ACT FAST, or he or she will not qualify, another red flag should be raised. Never rush to apply for something, especially if the urgent communication is unsolicited.
Some common unsolicited communications can include the following:
- “Act now to qualify for student loan forgiveness before the program is discontinued.”
- “Enrollments for student loan discharge are first come, first served.”
- “Your loan is flagged for forgiveness pending verification. Call now!”
A borrower should never supply his or her personal or financial information in response to these types of communications. The scammer may also try to get the borrower to provide them with his or her FSA ID. A borrower should never share his or her FSA ID with anyone.
The borrower should also never agree to pay anyone for student loan forgiveness. Scammers will often request an upfront fee or a monthly fee while they process loan cancellation. Payments should not be needed, and these types of communications should be flagged as potential scams.
Please click here to read more.
For borrowers who are struggling with student loan debt, relief options are available. Many student loan borrowers are unaware that they have rights and repayment options available to them, such as postponement of loan payments, reduction of payments or even a complete discharge of the debt. There are ways to file for bankruptcy with student loan debt. It is important you contact an experienced Miami bankruptcy attorney who can advise you of all your options. As an experienced CPA as well as a proven bankruptcy lawyer, Timothy Kingcade knows how to help clients take full advantage of the bankruptcy laws to protect their assets and get successful results. Since 1996 Kingcade Garcia McMaken has been helping people from all walks of life build a better tomorrow. Our attorneys help thousands of people every year take advantage of their rights under bankruptcy protection to restart, rebuild and recover. The day you hire our firm, we will contact your creditors to stop the harassment. You can also find useful consumer information on the Kingcade Garcia McMaken website at www.miamibankruptcy.com.
How to Avoid Student Loan Forgiveness Scams – Federal Student Aid
