As you have noticed, it is currently difficult to get reliable, up-to-date information on student loan programs. Congress is tied up in knots about making decisions – any decisions – that can help students and their families plan how to navigate the coming school year or pay for it. And our President is writing up confusing new executive orders that will probably never be put into action.
In any time of uncertainty, scammers seem to know just what to do, which is to try to defraud people. And right about now, those criminals seem to have decided that students and their families are good targets for loan-related scams.
What Scams Should You Be Aware Of?
According to “Don’t Fall for COVID-19 Student Loan Scams,” an article that Anna Helhoski wrote for NerdWallet.com on June 22, 2020, the current loan-related scams fall into two general categories:
- Trying to charge borrowers for what is free. Scammers contact you and attempt to charge you for something that a Federal loan program is already offering for free. According to Seth Frotman, executive director of the Student Borrower Protection Center, whom Helhoski interviewed for her article, “A company will charge to enroll you in a benefit you could have accessed for free, such as a Federal income-driven repayment plan.”
- Offering to satisfy loans for a reduced, fake flat fee. A scammer who is posing as a government or bank official contacts you and offers to cancel your entire loan amount for a flat fee that you can pay immediately over the phone using a credit or debit card. The problem? You pay that amount, it is charged to your card, and then the scammer disappears.
Basic Protection from Online and Phone Scams
“7 Ways to Protect Yourself from the Latest Scams,” an article that Tina Chang wrote for WhistleOut on August 10, 2019, gives a useful review of basic steps you can take to protect yourself and your family from online and phone scammers.
Remember to be safe, not sorry. Before agreeing to any loan repayment plan, call the college or company that you borrowed from and ask, “Is this legitimate?”
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Don’t Fall Victim to Back-to-School Financial Scams