With the resumption of federal student loan payments and the promise of loan forgiveness, scammers have seized the opportunity to exploit the situation. They are inundating the scene with false promises of loan cancellation and a myriad of other deceptive tactics, making it vital to stay vigilant.
Amidst the uncertainty surrounding student loans, staying informed and protecting yourself from the rising tide of scams is crucial. Here are some tips to help you steer clear of student loan scams by recognizing common red flags and taking necessary precautions.
Federal student loan payments recently resumed following a three-year payment pause. Repayments were initially suspended during the pandemic but restarted at the end of 2023.
In recent months, there have also been many instances of loans being forgiven with promises of more to come. Many borrowers are feeling the tension of payments resuming and holding out hope for loan forgiveness.
Scammers are all too eager to take advantage of the heightened emotions and swirling misinformation surrounding student loans. There has been a surge in emails, texts, and calls fraudulently informing individuals their student loans have been forgiven or claiming that they can qualify for forgiveness after enrollment. Unfortunately, these messages and programs are designed to prey on borrowers' hopes and trick them into sharing sensitive information.
It’s easy to get swept up in the uncertainty and believe what you may see in your inbox. But it’s essential to keep your wits about you so you can avoid falling victim to these latest scams.
Many scams follow similar patterns and employ the same tactics to trick you into playing along. Recognizing these recurring characteristics is the best way to protect yourself.
Here are red flags commonly reported specific to student loan scams:
Scammers will pressure you to act quickly. They claim that immediate action is required so you can avoid the supposedly dire consequences. If you receive any communications urging you to “act now” regarding your student loans, proceed with caution.
Fraudsters frequently make promises that seem enticing to lure you into their schemes. If you receive claims of immediate loan cancellation, especially claiming minimal effort on your part, steer clear. Remember that if an offer seems too good to be true, it probably is.
Another clear red flag is if anyone requests personal information from you. This could include your login credentials, Social Security number, or credit card information. Keep this information safe and never provide it to anyone.
If you must pay money upfront or enroll in a subscription to receive the service offered, you are likely dealing with a scammer. Do not send payments to anyone you are unsure about.
If you feel you’ve been a victim of one of these student loan scams, it’s important to act quickly. Submit a complaint or file a report with the following entities:
Report any fraud affecting your credit union accounts to us immediately.
Submit a complaint at the Federal Student Aid website, an Office of the U.S. Department of Education (StudentAid.gov)
Report the fraud to the Federal Trade Commission
File a complaint with the Consumer Financial Protection Bureau
With the resurgence of student loan scams, it’s more important than ever to stay informed and vigilant so you can protect yourself from these schemes. By recognizing red flags and taking steps to keep yourself safe, you can safeguard your personal data and your finances.
If student loan payments are stretching your budget thin, we’re here to help. Opportunities like refinancing other loans, like an auto loan, or consolidating high-interest debt can free up additional funds. To explore these solutions or learn more about the measures we take to keep your accounts safe every day, please stop by any of our convenient branch locations or call us at 248-322-9800 extension 5 to speak with a team member today.
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