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If a stranger offers you student loan forgiveness, hang up – Washington, District of Columbia

Washington, District of Columbia 2021-02-22 13:51:03 –

Student loan scammers have a whole new hook of “student loan forgiveness” or “stimulation forgiveness”. The back of the pitch is the same …

Student loan scammers have a whole new hook of “student loan forgiveness” or “stimulation forgiveness”.

Behind the pitch is the same old scammer playbook, persuading federal student loan borrowers to pay for free services and share personal account information in exchange for forgiveness.

The extended suspension of federal student loan payments and the resurrection story in Congress of debt exemption make such deception easier to believe.

“A lot of financial distress and turmoil can lead to a surge in debt relief fraud, both of which are currently underway,” said Persis Yu, a staff lawyer at the National Consumer Law Center and director of student loan borrowers. Stated. Support project.

To be clear, there is no new broad loan forgiveness program available beyond existing, often hard-to-find options, such as public service loan forgiveness and borrower defense against repayments. In addition, there are no applications or fees required to receive a federal student loan suspension that is valid from 13 March 2020 and lasts until 30 September 2021.

About that “exciting forgiveness”

It is safe to reject a sudden offer to repay your debt, consolidate your loan, or change your repayment plan as a fraud.

“There is no one on the planet who can make better deals on student loans or work directly with servicers to access programs that they don’t get,” said Betsy Mayotte, president and founder of. say. Student Loan Advisors Association.

Mayotte says he saw an increasing number of borrower complaints about “Biden Relief” and COVID-19 Relief Student Loan Scams.

In one example, the borrower sent a copy of a fraudulent voice email to Mayotte, making a compelling offer. “Your student loan seems to be flagged as subject to recent stimulus forgiveness and remedies legislation, but you need to complete your application.”

The caller heard legally (provided the name and agent ID number) and expressed the urgency to call back to the “dedicated eligible line”. The caller then further emphasized time sensitivity, stating that discharges are on a first-come, first-served basis.

“Interestingly, this number was entered as a DC number, and I’m sure this only adds credibility to their scams,” Mayotte says.

Borrowers need to remain vigilant as student loan scams are on the rise, primarily due to the “whac-a-mole” effect. As soon as one company is closed, another will appear in its place, says Michel Grahalles staff lawyer. Federal Trade Commission Consumer Protection Agency.

Notable red flag

The maxim “If it sounds too good to be true, then it is” is closely related to finding scams.

But the most effective ones often mix facts with fiction, Grajales says. Tactics such as using momentary phrases or claiming to work for the federal government make false promises that are more appealing to economically vulnerable people.

“They have heard something about mortgage forgiveness,” says Grajales. “They have heard something about the CARES law. Scammers try to hear it legally by throwing words that are in the spotlight.”

The basic structure of student loan scams has been the same for years, says Yu: companies promise some kind of forgiveness in a short period of time, charge a large upfront fee and put it in their pocket, and the borrower’s account. Go to to clean up your debt and register them for your income-driven repayment plan.

“If they do something (in debt), that’s what they tend to do, or they just take the borrower’s money,” says Yu.

Experts say it’s important not to prepaid cash, pass federal student assistance identification information, or give FSAIDs that allow fraudsters to act on your behalf.

“What they do is insert themselves between you and your servicer,” says Scott Buchanan, executive director of the Student Loan Services Alliance. “Often they change your email address, your email address, so all servicer communications go to these scammers, and it’s too late if they don’t do what they need to do. I don’t know until it becomes. “

Care should be taken when a company urgently declares “apply now” or offers services that it can do, such as registering for income-driven repayments or applying for a public service loan exemption.

If you have any questions, please contact the servicer directly using the website phone number instead of the number provided by the third party.

What to do if you are scammed

Remember that if you are in trouble, you are not the first student loan borrower to be the victim of predatory tactics.

“It has nothing to do with how smart you are. It has more to do with how good they are at their scams and how vulnerable you are when they reach you.” Says Mayotte.

According to experts, regaining control of your account is the most important first step to take if that happens. Method is as follows.

— Break all relationships with fraudsters.

— Contact the servicer and report an account breach. You may need to request a new FSA ID.

— Check your account contact information to make sure all ongoing communications reach you.

— Contact your bank to stop automatic payments to fraudsters.

— Freeze credits.

— Ask for legal assistance to collect the money.

— Report the fraud to the enforcement agency.

How to file a complaint about fraud

Fraud response can and must be reported to multiple sources. The more complaints these agencies receive, the more ammunition they have to take legal action against fraudsters. The scam will be reported and tracked to:

— Your federal student loan servicer.

— Federal Trade Commission.

— Consumer Financial Protection Bureau.

— State Attorney General’s office.

— US Department of Education FSA Feedback Center.

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This article was provided to The Associated Press by the personal finance website Nerd Wallet. Anna Helhoski is a writer for Nerd Wallet. Email: anna@nerdwallet.com. Twitter: @AnnaHelhoski.

Related Links:

NerdWallet: COVID-19 How to Avoid Student Loan Relief Scams http://bit.ly/nerdwallet-avoid-student-scam

Federal Trade Commission: Report Fraud https://reportfraud.ftc.gov/

US Department of Education: FSA Feedback Center https://studentaid.gov/feedback-center/

Copyright © 2021 AP communication. all rights reserved. This material may not be published, broadcast, written, or redistributed.

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