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How to Spot Student Loan Debt Forgiveness Scams

Scammers often use current events to make their solicitations seem more believable and Student Loan Debt Forgiveness is no exception. The U.S. Government recently announced their intent to forgive up to $20,000 of federal student loan debt for qualifying individuals. According to the Department of Education, 43 million Americans are eligible for student loan relief, and to scammers, that means a big pool of potential victims, so now is the time to be more vigilant. Here are a few tips to keep yourself, and your money, safe:

How to spot a Student Loan Scam

  • They ask for a “processing” fee: There is no cost to participate. Applying for student loan forgiveness programs is free, so if someone contacts you asking for a processing fee, it’s a scam
  • They use urgent wording, “you need to act immediately”: The Department of Education will never use strong advertising language to tell you to do something right away
  • They make empty promises: If they are promising to have more of your loans forgiven than Federal guidelines allow, it’s a scam
  • They ask for your Bank account information: If you get a call, hang up immediately – never share your personal information, especially over the phone, with someone you don’t know

Beware of Phishing Emails

Scammers may use phishing emails seeking to steal your sensitive personal information in connection with a student loan forgiveness scam. These attempts have gotten much more sophisticated in recent years, and may appear legitimate, using official logos and spoofed domain names. Be sure to independently verify the sender of any email seeking sensitive information. Always log into your student loan servicer website directly instead of clicking on links in an email.

What to do if you’ve been scammed

  • Contact Your Bank – notify them of the fraud and if any account information has been compromised. You may be able to dispute fraudulent transactions. Change your online banking and email passwords if these may have been compromised.
  • Monitor your accounts – even ones you don’t use. If you have fraudulent activity on an account and don’t report it in a timely manner, you may end up holding the loss.
  • Monitor your credit – watch for inquiries or accounts you don’t recognize and report any fraud immediately to the respective companies.
  • Be wary for future scams – you are at much higher risk to be targeted again once you’ve fallen prey to a scam.

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