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Watch Out for These Student Loan Forgiveness Scams

Here's how to tell if a text, email or phone call is from a hacker trying to access your personal and financial data.

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Last month, the White House announced its latest plan for broad student loan debt relief that could help more than 25 million borrowers. And scammers are already trying to get in on the action. 

The Federal Trade Commission issued an alert immediately following the announcement of the new student loan forgiveness plan, highlighting that scam emails and texts can often seem like the real deal. Scammers may even know your student loan account number or your outstanding balance. If they have access to that kind of information, it can be easy to think they’re a trustworthy source. 

You might assume that you’ll be able to identify scams, particularly if you’re a recent college graduate accustomed to navigating the dangerous potholes of digital scams. However, Gen Z and Millennials report falling victim to online schemes at a significantly higher rate than Baby Boomers, according to data from the National Cybersecurity Alliance

Plus, bad actors are getting increasingly sophisticated in their student loan scheming, and it’s working. In May 2023, the FTC stopped schemes from three companies that had managed to steal more than $12 million by impersonating the Department of Education. In February 2024, the FTC banned three individuals from the debt relief industry who had collected nearly $9 million in junk fees for student loan relief services.

“Scammers can forge the return address of an official email with a slight misspelling. So be careful and take a very close look at where it’s actually coming from.”

With so much confusion surrounding student loan debt relief, it’s easy to mistake a fraudulent message for an official one. If you have student loans, here’s how to spot debt relief scams right away and what to do if you suspect you were scammed.

If you get a phone call about your debt relief, it’s probably a scam

While it’s certainly possible to receive a call from the federal government, getting one about student loan forgiveness is pretty rare. 

You’ll never receive a legitimate phone call from the Department of Education, primarily because the organization simply doesn’t have the manpower to handle that kind of work, said Mark Kantrowitz, financial aid expert and CNET Money Expert Review Board member. Your loan servicer might call you, but if you suspect it’s a scam, hang up and call them back on their official phone line.

So if you receive a call from someone asking you to take action for debt relief, pay them money or share your financial data, odds are, it’s a scam.

Email scams are harder to spot, but fraudsters usually leave clues

Deciphering scam emails can be tricky, particularly if you check your email quickly on your phone. “Most cases involving broad student loan forgiveness will come from a .gov email address,” Kantrowitz said.

However, fraudsters have caught on and taken steps to make their emails look more legitimate, using “official” letterhead and links to the Department of Education’s official site. You’ll need to be discerning to weed out fraudulent emails.

“Scammers can forge the return address of an official email with a slight misspelling,” Kantrowitz warned. “So be careful and take a very close look at where it’s actually coming from.”

According to the Department of Education, these are the only email handles it uses when contacting you:

When it comes to texts, the Department of Education’s messages will come from only these two numbers: 227722 or 51592. If you get a text from a different number, be wary.

Additionally, Kantrowitz said that borrowers should know that communication from the Department of Education will provide information and won’t ask you to click on a link. “Nobody [from the Department of Education] is going to send you a message that requires you to respond via a link in a form,” he added.

Asking for money upfront is a surefire sign of a scam

Another way to spot scammers? Pay attention to what they’re asking you to do. If they ask you to pay upfront fees or request that you sign a third-party authorization form permitting them to negotiate on your behalf, it’s probably a scam.

It won’t cost you upfront money to apply for loan forgiveness. In many cases, your relief will be automatic. Likewise, you won’t ever be charged to consolidate your student loans through the Department of Education.

What to do if you think you’ve been scammed

If you’re concerned that you may have already fallen victim to a student loan scam, it’s important to reach out to your federal loan servicer immediately to ensure no recent actions were made on your loan account. If so, talk to them to correct any errors. If you paid a fee to the scammer, contact your bank or credit card company to stop the payment.

You should then file a report with the Federal Trade Commission online. You should also submit a report to the Consumer Financial Protection Bureau

Depending on the information you have shared, you could be at risk for further fraud, so be sure to monitor your credit report and freeze your credit if you’re worried scammers could open accounts in your name. You can also sign up for identity theft protection to protect your data further. 

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David McMillin writes about credit cards, mortgages, banking, taxes and travel. Based in Chicago, he writes with one objective in mind: Help readers figure out how to save more and stress less. He is also a musician, which means he has spent a lot of time worrying about money. He applies the lessons he's learned from that financial balancing act to offer practical advice for personal spending decisions.
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