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Scammers are targeting federal student loan borrowers

Posted at 8:36 AM, Jun 01, 2022
and last updated 2022-06-07 11:32:52-04

PHOENIX — Federal student loan payments are in limbo until the end of the summer and experts say scammers are using this time to trick you into putting money into their pockets.

The moratorium on federal student loan repayments is set to end on August 31 but many borrowers are waiting to see if that pause gets extended yet again, or if President Joe Biden will unveil a plan to forgive at least some federal loans.

Borrowers who have been taking advantage of the more than two-year pause likely haven’t checked on their loans in a while and might not be aware that their loan servicers could have changed during that time.

It makes easy pickings for scammers; they know there’s confusion and they’re trying to cash in on it.

Mary Jo Terry with private student loan refinancer Yrefy tells ABC15 they’re seeing a lot of scammers trying to get people to pay to fill out federal loan documentation or try to get personal information out of borrowers.

“[Borrowers] are getting calls saying ‘Hey, we can get your loans forgiven or charged-off… give us X amount of dollars, give me your credit card number and I can get this taken care of for you,’” Terry said.

Your personal and financial information is a red flag, Terry said. No one should be asking for that over the phone, and you wouldn’t be paying for any information tied to federal programs.

“Believe it or not, some of these scammers are spoofing real lenders’ 800 numbers, so be careful and know who your loan servicer is,” Terry said. “If you get a phone call and you think it's your loan servicer, your loan servicer already has your personal information. Your loan servicer has your date of birth, social security number, and all of your address, and information along those lines, so be really cognizant if somebody is asking you about that.”

Terry said it’s important to know who your loan provider is since it could have changed and exactly how much you still owe and if you do qualify for any government forgiveness programs.

If you’re unsure, visit studentaid.gov to check in now even before the pause ends.

Meanwhile, President Biden is reportedly nearing a decision on federal loan forgiveness, although the White House has said no official decision has been reached.