Safeguard Yourself Against Student Loan Scams
Posted June 10, 2024
By GreenPath Financial Wellness
Millions of people have student loans, and students aren’t the only ones with money on their mind. If you or a loved one has student loans to repay, it's crucial to be aware of online scammers who target borrowers with the aim of cashing in. Here are some strategies for protecting yourself and your finances.
Recognize Common Scams
Safeguarding yourself begins with awareness. Here are some of the most prevalent student loan scams:
- Advanced Fee: Scammers promise to reduce your loan balance or lower interest rates in exchange for an upfront fee. Legitimate loan servicers do not charge fees for federal student loan assistance.
- Phishing: Scammers impersonate official loan servicers or government agencies through emails, websites, or phone calls, aiming to steal your personal information, including your Social Security number and financial details.
- Forgiveness: Scammers claim to offer immediate loan forgiveness, even if you don't qualify. They may request payment for this service or try to steal your personal information.
- Fake Loan Consolidation: Scammers may promise to consolidate your loans into a single, low-interest loan. They may charge fees or steal your identity during the process.
Verify Loan Servicer
Verifying your loan servicer is an important step to take in general, as many loan servicers changed during the pandemic. Verify your loan servicer by visiting the official Federal Student Aid website. If you have private loans, review any correspondence you’ve received from your original loan servicer. You can also ask your school’s financial aid office for help in finding that information or pull your credit reports at AnnualCreditReport.com.
Use Two-Factor Authentication (2FA)
Enable two-factor authentication on your student loan account and associated email addresses. This added layer of security can prevent unauthorized access to your accounts, making it harder for scammers to breach your personal information.
Identify Red Flags
Some common warning signs of student loan scams can include:
- Unsolicited Communication: Scammers often initiate contact through unsolicited emails, calls, or messages.
- Requests for Personal Information: Legitimate servicers won’t request sensitive information like your Social Security number or bank account details via email or phone.
- Pressure Tactics: Scammers may pressure you to act quickly, claiming that opportunities are time-sensitive or urgent.
- Unrealistic Promises: Does an offer (such as immediate loan forgiveness) seem too good to be true? Chances are, it is.
- Poor Grammar and Spelling: Messages or websites with spelling or grammar mistakes should raise alarm. Verify the URL and defer to official sources such as the Federal Student Aid website.
Monitor Your Credit Report
You can obtain a free annual credit report from each of the three major credit bureaus (Equifax, Experian, and TransUnion) on AnnualCreditReport.com. Review these reports carefully for discrepancies, unfamiliar accounts, or unauthorized activity related to your student loans.
Report Suspicious Activity
If you suspect you've encountered a student loan scam or have fallen victim to one, report it immediately. Contact the Federal Trade Commission (FTC) and your loan servicer directly (for federal loans, you can submit a complaint online).
Seek Guidance
If you’re feeling overwhelmed by student loan repayment, take comfort in knowing you don’t have to navigate this process alone. Connect with us to see what additional security resources we can provide, and consider student loan counseling with GreenPath Financial Wellness. It's confidential and free for our members!
This article is shared by our partners at GreenPath Financial Wellness, a trusted national non-profit.
Categories: FinancialAdvice
