Scammers take advantage of borrowers’ confusion and fear. The latest scam is especially dangerous because it references actual events in the news.

Congress passed multiple stimulus relief packages. The legislation included many forms of help for struggling Americans. Additionally, there has been extensive discussion about student loan forgiveness or cancellation.

Enter the scammer trying to take advantage of complicated events in the news and student loan desperation…

Sherpa Tip: I’m especially worried about this particular scam because it sounds like an actual government program recently announced by the Department of Education.

The Scam Email: Act Now for Student Loan Forgiveness from Stimulus Relief Legislation

A reader recently forwarded the following email. Fortunately, she didn’t fall for this scam. However, she thought it might be helpful to alert others who receive a similar email. Rather than including the entire email, I’ll quote a few relevant sections.

It looks like your student loan may be eligible for the recent stimulus forgiveness and relief legislation, however, your application does need to be completed. This applies to all loan statuses, including those loans in default and garnishment.

After mentioning this “new legislation,” the email creates some urgency:

We can have this applied immediately. Please be aware that these benefits come on a first come first serve basis though.

The email ends with contact info for the scammers and a strange note:

If you don’t have student debt please ignore this message.

The scammers also had the first and last name of the reader and included her name in the subject of the email. They also added a verification code, agent id, and physical address in Nevada. These items are nonsense but give an appearance of legitimacy.

The Red Flags in this Email

This particular email contains numerous red flags that should help borrowers avoid the scam.

Student Loan Stimulus Legislation

Many student loan borrowers think student loan stimulus legislation should exist. Unfortunately, it does not. If this legislation actually happened, it would be headline news and easy to verify in many different ways.

First Come First Serve Benefit

Scammers often try to create urgency. If you are told to “act now,” it should be a huge red flag. The only temporary student loan program with limited funding is the Temporary Expanded Public Service Loan Forgiveness program. This particular program has been around for years.

Please Ignore This If You Don’t Have Student Debt

This particular scammer just knew names and email addresses. They targeted student loan borrowers because so many people are impacted by student debt. This is a common practice. If someone knows your name and knows that you have student loans, it does not indicate legitimacy.

A Hotmail Account Instead of a Federal Student Loan Servicer

If such a program existed, notification would almost certainly come from the Department of Education or a federal student loan servicer. A random Hotmail account means it is undoubtedly a scam.

Calling Out Scammers by Name: In the early days of this website, I identified scams by the name of the company to help borrowers. I wish I could still do this, but it just isn’t possible at this time.

Legitimate Government Stimulus and Forgiveness

This particular scam email is especially troubling because it sounds similar to an existing government program.

Last October, the Department of Education announced a Limited Waiver on Public Service Loan Forgiveness. One of the Covid-19 relief bills authorized this temporary program, but it expires on October 31, 2022. The limited waiver helps borrowers who were on the wrong repayment plan or who had ineligible loans.

If you are trying to decide whether you are looking at a scam email or an actual government program, check out the studentaid.gov detailed explanation on the limited waiver. Contact your federal loan servicer if you think you might benefit.

If you suspect you are being scammed, try to fix things right away.

Avoiding this Scam and Others Like It

Although it made it through Gmail’s spam filters, formatting issues made this email appear to be spam. Hopefully, this makes it an easy one for most people to ignore.

However, sometimes the scammers are more convincing. This particular scammer knew the name associated with the email address. Given the number of database hacks we read about in the news, it shouldn’t come as a surprise that scammers can get this information. If this scam was a little more convincing, it might have been very effective. People are desperate for student loan help, and many will act if there is even a chance it is legitimate.

For this reason, borrowers need to be on high alert for the many student loan scams out there. If you think you have been scammed, there are steps you can take to address the situation immediately.