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In the sea of unknown and unwanted calls we get daily, some seem pretty tempting — like when a caller offers immediate relief from student loan debts.
We’ve grown up hearing “if it sounds too good to be true it probably is.” But that saying is easy to ignore when you’re already seeking out loan forgiveness or debt relief. After a decade or more of paying monthly installments with little or no movement on your principal, it may be appealing to try something different.
There’s a lot of ambiguity around student loan relief and forgiveness right now, and scammers are happily taking advantage of the confusion. How can you protect yourself from student loan scam calls?
When it comes to handling your student debt and avoiding scams, knowledge is your most valuable asset. If you’re overwhelmed by monthly payments or seeking forgiveness on your loan, there are legitimate programs that you can use to reduce payments or eliminate your debt outright. Better yet, they’re all free through your official loan servicer.
However, none of those programs will contact you first. Cold calls or robocalls from telemarketers are almost always bad news, even when they talk about programs that sound legitimate (“Cares Act loan forgiveness” or “Biden loan forgiveness” are two very real sounding programs that don’t exist.)
So, how do you get ahead of these scammers while seeking necessary financial relief?
The first step to protecting yourself is knowing what you’re up against. What are student loan scams, how do they work, and why are they so effective?
A standard student loan phone scam call will start with a cold call. The scammer likely knows that the borrower has considerable loan debt — most will have gained access to your credit report illegally, so they can pull numbers on your accounts — and they are calling to offer you relief from your burden.
They’ll tout appealing options, loan reductions, or outright forgiveness on debt, with the bonus that they’ll handle everything. All you need to do is give them your personal information, bank account number, or the login and password to your student loan account. This is where the trouble starts.
This style of phone scam has increased in popularity, thanks to widespread confusion and uncertainty surrounding pandemic-related payment deferral. Add in the popular push for student loan forgiveness that gets regular coverage in the news, and enough misinformation is circulating to power a really effective scam.
That’s why educating yourself is the first line of defense against potential student loan phone scams.
Known scams that the FTC has already taken action against include:
Student loan consolidation scams
The scammer calls offering to consolidate your federal student loans…in exchange for a fee. They will usually take your money (and sometimes your personal information) without ever processing the application. Remember, if you wish to consolidate your loans, it can be done for free at studentloans.gov.
Student loan debt relief scams
The scammer calls to promise quick and easy payment reductions or lower interest rates on your student loan debt in exchange for a fee or access to your personal information. The scammer will then “manage” or “take over” payments for a period of time, all the while pocketing your money without making any payments on your behalf. Alternatively, they may just steal your personal information or take untraceable debits straight from your bank.
Student loan forgiveness scams
Perhaps the most tempting scam of all, these involve the caller offering to get your debt forgiven completely and immediately, often by citing some made-up government program or lying about the terms of a real one. The end goal is the same — take your personal information and money.
Federal forgiveness plans and income-based repayment plans take years to complete, and are only available through the Department of Education. If a cold caller offers to do this service for you for a fee, it's a scam.
Student loan offer scams
Finally, some scam calls will offer new loan products, often with too-good-to-be-true interest rates or payment terms. If you were cold called by a loan provider, there’s a good chance it’s a scam. The easiest way to make sure is to hang up, call the company back on an official number, and ask if the offer was genuine.
Here are some examples of what a student loan scammer call may sound like:
Let’s go over some common red flags that should tip you off to a scammer’s true motive:
The big thing to remember here is that federal programs do not require extra payment for loan forgiveness. If someone talks about charging you a fee or monthly installment for a debt relief service, that’s the number one sign it’s time to hang up the phone. Anything the caller is promising to help you do, you should be able to do yourself or with help from your loan servicer for free.
If you’re experiencing financial hardship, your loan servicer can help you with that, too. In fact, it’s their job to work on the behalf of the U.S. Department of Education to:
Anyone offering to handle these operations for a fee or represent you to the DoE or your lender is up to something. Don’t buy it!
Immediate Loan Forgiveness
Student loan forgiveness scams make big promises that they know they can’t keep. Most government forgiveness programs require years of qualifying payments and qualifying employment before loans can be forgiven. Anyone who claims to have access to a special program that will offer fast, painless loan forgiveness is looking to scam you.
Requests for FSA ID Password
You will never, ever be asked for your FSA ID password by your loan servicer or reps from the Department of Education. This ID password is used to sign legally binding documents, and has the same status as a written signature — don’t hand it over to a stranger or let anyone create one in your name!
If you give your password away or sign over power of attorney, you’re giving a debt relief company the authority to take any action they choose. They are legally empowered to make decisions for you and act on your behalf.
That means if they collect fees from you, but never make a payment on your behalf, you’re still responsible.
Claims of Government Affiliation
The caller claims to be affiliated with the Department of Education or another government agency but something isn’t quite right.
Despite using official seals, names, or logos on their website, they aren’t listed on the official studentloans.gov loan servicer list. Big red flag, hang up the phone immediately.
The longer you spend researching or considering your options, the less likely you are to fall for a scam. Time is of the essence, and scammers will apply immense amounts of pressure on you to cough up your personal information without giving you time to think it through.
If the person on the other line pressures you to take action right away with promises of quick relief or forgiveness, that’s another sign they’re running a scam.
Some of the most common sales pitches scammers use include:
Obvious Spelling or Grammatical Errors
While a scam company’s communications may look formal, they will often include spelling or grammatical errors.
If you notice unusual capitalization, improper grammar, or incomplete sentences, that’s a big red flag that they’re not associated with the Department of Education.
No, not all student debt forgiveness or relief programs are scams! However, many of them are scams, so it’s always worth doing your research beforehand.
Most student loan services scam calls offer to do things that you could easily do yourself. For example, a company may actually be able to reduce your monthly payment, but that is something you can do in less than an hour for free. If you ever need help with the process, a loan servicer will help you — at no cost.
There’s never any reason to pay a fee for help to get these services, and there are too many bad actors out there looking to take your information. It’s not worth it.
Are student loan forgiveness calls a scam?
Student loan forgiveness programs are usually complicated, take a long time, and require specific criteria. If someone is offering quick forgiveness or forgiveness that is available to anyone, it’s best to hang up as that’s definitely a student loan forgiveness scam call.
For example, the most common program is for Public Service Loan Forgiveness. It’s great to know this program is real, however, It’s not available to everyone — in order to qualify, you need to be employed in one of a few specific public service fields. You also will have to have already made 120 months of qualifying payments.
To find out if you qualify for any forgiveness program, don’t trust a caller, visit studentaid.gov or contact your loan provider.
Student loan scams are against the law, and the FTC has taken action against some fraudsters.
For example, the FTC led a coordinated federal-state law enforcement initiative targeting deceptive student loan debt relief scams in 2017 called “Operation Game of Loans.” The crackdown targeted scammers alleged to have used “deception and false promises of relief to take more than $95 million in illegal upfront fees from American consumers over a number of years.”
Only a few months ago, the FTC shut down Student Debt Relief Group, which has now paid $1.7 million in refunds for tricking people into thinking they were affiliated with the Department of Education.
The FTC also keeps a running list of companies and people who are banned by law from offering debt relief, including student loan debt relief. You can search the full document here.
However, if you have been scammed by a student loan “servicer,” your rights and protections may be limited.
For example, if you signed over power of attorney or authorized a third party to represent you, you are likely responsible for payments and obligations.
If you’ve lost money to a student loan scammer, contact a local attorney to get a clear understanding of your rights. Then, report the scam phone number with authorities, such as the state insurance board or the FTC.
Our number one piece of advice if you feel fishy about a call is to hang up. From there, you can research the organization at your own pace or get in touch with your lender.
If you think you’ve been in contact with a scam caller:
If you’ve provided any information to a scammer, take action immediately to protect your information:
Scam calls can be annoying, disruptive, and at times unsettling and harmful — especially when they spoof reputable lenders or government agencies. Getting out of student loan debt is challenging enough: don’t let the scammers out there make it harder for you.
For people who receive numerous spam calls or texts, the FTC recommends adding a blocker app to your phone to eliminate contact with questionable numbers.
Don’t leave your personal data vulnerable. Always make sure the spam call-blocking app you download is committed to safety and privacy when it comes to your information. Click here to read RoboKiller’s stance on protecting your privacy.
Your mobile device will also have blocking features to support your call screening efforts. For example, Apple iPhones now feature an option to silence unknown callers. When activated, this feature silences ringing and vibration for any incoming calls that aren’t saved to your address book.
Here’s how to enable this setting:
Please note: This function will silence all unknown calls, so if you’re expecting an important call that could come from outside your address book, you may miss it.
Android phones have a similar function that uses caller ID to notify you of potential spam calls.
Here’s how to block robocalls on Android phones:
Of course, you should also add your phone number to the National Do Not Call Registry. This option costs nothing, and prevents sales callers from contacting you over the phone without prior consent. Unfortunately, it doesn’t block scam calls (because scammers don’t follow the law).
Or, inquire with your mobile or landline phone provider to see if it offers call blocking or call labeling services. Some of these services are complementary or included in certain plans, but some may cost an additional fee.
You don’t have to put up with annoying calls, especially from scammers. Fortunately, there’s an easy way to block unwanted calls and text messages for good.
RoboKiller is the only call blocker app that uses AI and machine learning to identify and block potential spam calls and text messages.
It does this by using digital fingerprints to identify the caller or texter behind the message. With that information, the app cross references numbers against a Global Blocklist of scam phone numbers. This list is updated daily to change with the ever present movement of illegal activity. This means that even if a scammer updates their phone number, we’ll be able to spot them before their call ever reaches your phone.
Here’s how it works:
Stop getting unwanted spam texts
RoboKiller’s advanced software can also use metadata associated with a text to look for common characteristics of a scam text. It will automatically anonymize and protect your personal information and then determine whether or not to block the text. No more worrying about questionable links or inquiries in your texts.
You’re in full control
Occasionally, you may want to get a text from a number that is flagged by RoboKiller.
Adding that number to your “allow list” will circumvent the blocking feature and let you receive calls and text messages from that person again. You can change your mind at any time and add or remove numbers from your call list.
It’s that easy to get back control and start getting only the calls you want, and none of the rest.