WASHINGTON D.C., DC — The Better Business Bureau issued a warning Friday for those with federal student loans to beware of a new scam looking to take advantage of any confusion associated with the Biden Administration's plans to cancel student loan debt.
"Victims are telling BBB Scam Tracker about a loan forgiveness scam where the caller has their Social Security number, graduation date, and even Federal Student Aid information," the BBB said.
How this scam works
You receive a call or voicemail from someone claiming to represent the new student loan forgiveness program. The scammer insists they can help you secure tens of thousands of dollars in loan forgiveness.
According to one recent BBB Scam Tracker report, one con artist promised to erase $60K of the victim's student loan – an amount well beyond the Biden Administration plan.
These callers have a convincing amount of information as well as "all kinds of numbers and figures to tell you what you're going to save," according to recent BBB Scam Tracker reports.
One report said the caller "not only had my email address but also the name of the school I attended and the last 4 digits of my social security number."
Another victim reported that the scammers "somehow knew my FAFSA account info and made me believe they work in conjunction with the loan forgiveness program."
In most versions of this scam, the caller insists that the victim must pay them an initial fee – typically several hundred dollars spread over a couple of months – followed by smaller monthly payments.
Then, when the current pause on the loan forgiveness program ends, your loan will be forgiven, the scammers state.
"Unfortunately, these con artists have no association with the official student debt relief plan," the BBB said. "Anything you pay will go into the scammers' pockets and will do nothing to help relieve your student loans."
How to spot this scam:
- When in doubt, contact the government agency directly. If you receive a message that seems legitimate but you aren't sure, stop communicating with the person who contacted you. Then, verify their claims by contacting the government agency they say they represent. For details on the student loan forgiveness program, visit ED.gov or StudentAid.gov.
- Never pay fees for a free government program. Government agencies will never ask you to pay a fee to benefit from a free government program. Don't let scammers persuade you otherwise. Con artists may say the fee will get you relief faster or will unlock additional benefits, but that is all part of the scam.
- Read more tips. See the full BBB Scam Alert for more advice.
For more information
Get more solid advice by reading the BBB Tip: Student loan forgiveness is here. Here's how to avoid scams.
You can also read up on government impostor scams in this BBB study and learn how to spot a scam.
If you've been the victim of a scam, report it to BBB Scam Tracker. By reporting your experience, you can help others avoid falling for the same scam.
