“Hello! You have been identified as someone who could benefit from a new student loan plan just passed by Congress and possibly have all of your loans forgiven.”
At that point I hung up.
It looks like the newest auto-dial pre-recorded scam is student loan based, and it is easy to see why. Student loans repayment is way too complicated, 40 million people have student loans, and many struggle to be able to make payments.
Perviously, these scams have popped us as companies offering federal student loan consolidation services, or providing enrollment in federal student loan forgiveness programs. All these companies are doing is charging you for a free government program. Best case scenario, you pay someone to sign up for a program that you could have signed up for yourself. Worst case scenario, you lose out on your money, don’t get the programs promised, and possibly have your identity stolen.
To the credit of many state attorney generals, the Department of Education, and the Consumer Financial Protection Bureau; efforts are being made to inform borrowers of these scams and to hold guilty parties accountable. Unfortunately, it isn’t easy to get the word out to 40 million people, many of whom are desperate enough to fall for this sort of trap.
The Consumer Financial Protection Bureau recently listed some of the warning signs of a scam:
- Pressure to pay high up-front fees.
- Promises of immediate loan forgiveness or debt cancellation.
- Demands that you sign a “third party authorization.”
- Requests for your Federal Student Aid PIN.
In addition to the sound advice from the CFPB, keep the following suggestions in mind:
- If it sounds too good to be true, it probably is. Most people have a pretty good instinct for when something is off. We may not be able to identify exactly what seems wrong, but often there is a voice in the back of your head saying that something is wrong. Listen to that voice. These scammers prey upon your desperation and optimism about a better future. If you hear grand promises that are different than what you have previously been told, it might not be the real thing.
- If they are talking about new legislation that you haven’t heard about, it probably doesn’t exist. Congress does not pass laws in secret, nor does the President. There is no brand new Obama Student Loan Forgiveness Program. Congress hasn’t just passed this great new law. If there was a major development in student loan law, it would be big news. You could google it and read about it in the New York Times or the Wall Street Journal. If you can’t find any information about the “new law” that you are being told about, this “new law” probably doesn’t exist.
- If they don’t even know your name, they are not calling about your student loans. This was another dead giveaway in the call that I received today. Scammers can try to pretend to be a reputable company, or even your student loan company, but if they don’t even know who they are calling, they are probably up to no good.
Dealing with Student Loans
One of the biggest obstacles in dealing with federal student loans is the federal student loan servicers. They often get information wrong, and mistakes are far too common. Unfortunately, these servicers are the companies we are stuck with. When it comes to dealing with student loans, do you research and make sure you know exactly who you are dealing with. The best way to stop a scammer is to never give them a minute of your time.