By Charlestien Harris
Student loan forgiveness is a hot topic these days, not just for consumers looking to take advantage of the opportunity but also for scammers who keep up with the news on student loan forgiveness. Scams are among the leading financial crimes, and many consumers are unaware they’ve been scammed until afterward. Scammers are becoming more educated and tech-savvy in disguising themselves as legitimate services or people you need to speak with for necessary business.
The only reliable source for managing federal student loans is StudentAid.gov. Neither Federal Student Aid nor your federal loan servicer will ever pressure you to sign up for anything or charge a fee for services. However, scammers will. These are what I like to call “red flag” signals. Recognizing scams or scammers can be challenging, but here are a few tips to help identify them:
- NEVER pay an upfront fee. This should immediately raise an alarm when engaging with their “service.” Most consumers are unaware that it’s illegal for companies to charge before helping reduce or eliminate student loan debt. If you have to pay upfront, you might not receive any assistance or get your money back. You can get free help managing federal loans at StudentAid.gov/repay. For private loans, contact your loan servicer directly. NEVER pay for something you can do yourself for free.
- NEVER share your FSA ID login information. This tip is equally crucial! Often, we make it easy for scammers by freely giving them our information. They gain our trust by using the right language or terms related to student loan forgiveness. Scammers follow the news about loan forgiveness just like everyone else. Only a scammer would claim they need your FSA ID to help you. If they obtain it, they could cut off your access to your loan servicer or steal your identity.
- NEVER rely solely on recognizing government seals or logos. Scammers often use official-looking names, seals, and logos to appear legitimate. Technology advancements are often exploited by scammers to deceive. Always check for spelling errors, off-centered pictures, or inaccuracies in location and addresses. Also, look for “https” in a website’s URL, indicating a secure connection. Do your research to ensure legitimacy.
- NEVER pay for promises of “special” access to loan forgiveness programs. There’s no special access to these programs. No one can qualify you for programs you’re ineligible for or make your loans disappear. Use your FSA account dashboard to see the programs for which you may qualify. Follow instructions on the FSA site or contact your federal loan servicer for information. For private loans, explore negotiation or restructuring options.
- ALWAYS report scammers to the proper authorities. Talking about scams helps prevent them. Share what you’ve learned to protect others from falling victim. Report scams to the Federal Trade Commission (FTC) or the Consumer Financial Protection Bureau (CFPB).
Losing money or property to scams is devastating. Being informed helps you recognize scams or their signs before becoming a victim. According to recent FTC data, consumers lost $10 billion to scams and fraud in 2023, up 14 percent from the previous year.
For additional information on this and other financial topics, visit our blog at banksouthern.com/blog, email me at Charlestien.Harris@banksouthern.com, or call me at 662-624-5776.
Until next week – stay financially fit!