In December of the previous year, the Biden regime announced an extension of the student loan payment moratorium. People who have taken out federal loans won’t have to pay before 1st May.
A lot of confusion has ensued in the wake of this announcement as many have called for widespread loan forgiveness and changes to be implemented in loan repayment. This has created the perfect storm for scammers to exploit.
Many borrowers are at a higher risk of succumbing to these scams since the pandemic has harmed their financial stability, making them more desperate for a solution to their financial imbroglio. Scammers are exploiting this urgency to defraud borrowers.
The situation for many borrowers is rather dire. Several have said that they will not be able to resume payments even several months after the moratorium ends. Taking advantage of this, scammers are luring such borrowers with fraudulent claims that they can help forgive their loans.
How To Identify Student Loan Scams
Prevention is the best means of protecting yourself from student loan scams. You should be skeptical of anything that looks too good to be true. It is best to exercise extreme caution and skepticism if you ever get a call or letter in the name of loan forgiveness.
Scammers use several tactics to win the trust of their unwitting victims. For example, they may disclose the outstanding loan balance of the victim to present themselves as a legitimate business that has access to such confidential information. Many victims wrongly presume that just because scammers have some of their details, it means that they must be a genuine business. The trouble is that scammers use various tricks and tactics to access critical information, which they can then exploit illegally.
Ask Questions
To confirm whether the process is legitimate or otherwise, you should ask pertinent questions. For example, you should ask the name of the program that you are being offered.
Scammers frequently resort to spurious and non-existent programs to snare borrowers. For example, they often claim to be working under the “Biden loan forgiveness scheme” or the “CARES Act loan forgiveness initiative.” Both of these don’t exist. You should look up online for such programs. If you find nothing, then you can be certain that this is a fraud. Another key point is the payment demand made by scammers. Forgiveness programs often don’t entail ‘fees’ or ‘payments.’
Bottom Line
Student loan scams are rising due to unfortunate circumstances that borrowers are exposed to. Scammers are exploiting the susceptibility of borrowers to realize their nefarious schemes. No matter your situation, you can follow the steps mentioned above to remain safe.