Student loan debt is a crisis in America, with over 43 million borrowers owing more than $1.6 trillion in student loan debt. With rising loan balances coupled with difficulties finding high-paying jobs, it’s no wonder borrowers are desperate for ways to eliminate their student loan debt.
Unfortunately, scammers are capitalizing on borrowers’ desperation with an emerging student loan forgiveness scam. Fraudsters are robocalling student loan borrowers, trying to dupe them into paying upfront fees in exchange for student loan forgiveness. Don’t fall for it!
This article will provide an in-depth overview of the student loan forgiveness scam phone calls, how the scam works, what to do if you’ve fallen victim, and steps you can take to protect yourself.
An Overview of the Student Loan Forgiveness Scam Robocalls
The student loan forgiveness scam starts with borrowers receiving a robocall claiming their student loans have been flagged for forgiveness. The pre-recorded message urges borrowers to call a provided telephone number to speak with their “dedicated loan officer” about securing loan forgiveness.
Of course, it’s merely a ploy to capture your personal information and money. The scammers masquerade as representatives of legitimate student loan forgiveness programs to earn your trust. Once contacted, they’ll request upfront fees ranging from $200 to $1000 to process your loan forgiveness application.
Scammers may alter caller ID information to appear as if the calls are coming from the Department of Education or legitimate student loan servicers like Nelnet or Navient. The robocalls often use spoofed telephone numbers to further the illusion the calls are official.
After borrowers pay the requested fees, the so-called “student loan officers” disappear with their money. Victims not only lose their hard-earned money; they are no closer to securing student loan forgiveness. Their personal information gleaned by the scammers also leaves them vulnerable to identity theft.
Unfortunately, student loan borrowers across America are falling victim to this scam. The Federal Trade Commission even issued an alert warning the public about the student loan forgiveness scam calls. And the scam artists continue to cast a wide net, blasting out millions of robocalls in hopes of duping student loan borrowers. Don’t become their next victim!
How the Student Loan Forgiveness Scam Works
Now that you understand the basics of the student loan forgiveness scam calls, let’s take a deeper look at exactly how the scam works. Understanding the tactics can help you recognize red flags if you ever receive one of these bogus calls.
Here are the 6 steps scammers take to perpetrate the student loan forgiveness scam:
1. Scammers Obtain Lead Lists
The scammers start by procuring lead lists of names, telephone numbers, and potentially other details about student loan borrowers. Details like loan balances, school attended, or current loan status help them create tailored pitches impersonating legitimate student loan servicers.
They get these lead lists from a few different sources, including:
- Online Lists: Scammers purchase lead lists from shady online data brokers. List providers scrape the internet and black market records to compile student loan borrower contact information.
- Insider Schemes: Some scams originate from corrupt insiders at student loan servicers or Department of Education contractors who illegally sell lead data.
- Phishing Schemes: Scammers use phishing emails and websites to trick borrowers into inputting personal information, which gets added to lead lists.
- Previous Scams: Contact information collected from previous scams provides new leads. Details gathered during the student loan scam calls enable additional future scams.
2. Robocalls are Blasted Out
Once scammers compile lead lists, they use autodialing technology to blast out massive volumes of robocalls to student loan borrowers’ phones.
The robocalls deliver urgent pre-recorded messages claiming the recipient has been approved for student loan forgiveness. To maintain the illusion, scammers often manipulate caller ID information to make it seem as if the calls are coming from the Department of Education.
Of course, the pre-recorded messages are complete lies. But scammers mix in real student loan program names like Public Student Loan Forgiveness or Borrower’s Defense Against Repayment to inject credibility.
The calls urge recipients to speak with a dedicated loan officer to complete their loan forgiveness application. Borrowers are given a toll-free number to call back.
3. Scammers Pose as Loan Officers
When borrowers call back the number left on the robocalls, they reach a call center staffed with scammers posing as student loan servicers or Department of Education representatives. The scammers continue the ruse with their sales pitch.
They verify personal details about the borrower and their student loans to build trust. Scammers reference real Department of Education programs while pitching loan forgiveness opportunities.
Some may pretend to check systems and proclaim the borrower qualified for immediate loan forgiveness if they complete the application requirements – for a fee. Others may claim they will submit a forgiveness application on the borrower’s behalf after securing the fee.
Of course, it’s all lies intended to get the victim’s money.
4. Scammers Request Upfront Fees
Once the fake student loan officers earn the borrowers’ trust, they go in for the kill by requesting upfront fees. They claim the fees are essential to process the borrower’s forgiveness application.
Requested fees typically range from $200 on the low end up to $1000. Scammers often insist the victim provides payment immediately via hard-to-recover methods like gift cards, wire transfers, or pre-paid debit cards.
They may claim the upfront fee will be applied toward future loan payments once forgiveness is secured. But borrowers should know legitimate student loan forgiveness programs do not require upfront fees.
5. Scammers Disappear with the Money
After borrowers pay the requested upfront fees, the scammers take the money and disappear. The so-called student loan officers suddenly become unreachable by phone.
Of course, the scammers never actually submit any forgiveness applications either. They simply pocketed the upfront fees with no intent to follow through on their false promises.
At this point, borrowers realize they have been conned out of their hard-earned money. And victims are often hesitant to report the scams due to embarrassment about falling for them.
6. Scammers Sell Victims’ Information
To add insult to injury, scammers capitalize further on victims by selling their personal information. Names, contact details, student loan information, and other data gathered during the scam provide scammers an ongoing revenue source.
They sell victim contact lists to other scammers running additional telemarketing cons and phishing schemes. Stolen information also gets traded on the dark web. Fraudsters may leverage victims’ info to commit identity theft.
As you can see, scammers rely on well-planned techniques to successfully pull off each phase of the student loan forgiveness scam phone calls. But armed with insight into how the scam operates, borrowers have a much better chance of spotting red flags. Hang up immediately if you receive one of these sham calls.
What to Do If You Fell Victim to the Student Loan Forgiveness Scam
If you already fell victim to the student loan forgiveness robocall scam, take the following steps to mitigate damage and prevent further loss.
Report the Scam Immediately
First, report the scam immediately to the following agencies:
- Federal Trade Commission: File a complaint with the FTC at https://consumer.ftc.gov/ Provide details on how the scam occurred, the scammer’s contact information, and the money you lost. The FTC tracks fraud trends with complaint data and alerts the public about ongoing scams.
- State Authorities: Contact your state attorney general’s office and local consumer protection agency to report scam calls originating within your state. Many states now have dedicated anti-robocall task forces investigating illegal scam calls.
- Phone Carrier: Report scam calls to your local phone carrier by forwarding scam calls and voicemails to 7726, the carrier’s designated spam line. Carriers identify and block numbers associated with illegal scam calls when made aware. If carriers identify patterns, they work with authorities to investigate and shut down scam operations.
- Social Media: Warn social media connections about current student loan scams by posting on sites like Facebook, Instagram, and Twitter using hashtags like #studentloanscam. Broad awareness helps curb the scammers’ success.
Reporting promptly increases chances of recovering losses and preventing other victims. But act quick, as scammers shut down and relocate operations rapidly after completing a scam.
Dispute Unauthorized Credit Charges
If scammers duped you into providing a credit or debit card number, contact your card issuer immediately to dispute the charges as fraudulent. Inform them you are the victim of a student loan scam.
Provide details on the date the unauthorized charge occurred, the merchant name, transaction amount, and other pertinent payment details. This starts a fraud investigation and fraud liability protections will limit your responsibility for unauthorized charges.
If you paid scammers using alternative money transfer methods, unfortunately recovering the funds will be much more difficult. Methods like gift cards, wire transfers, pre-paid debit cards, and cash app payments are nearly impossible to reverse once in the scammer’s possession. But you should still contact the affiliated companies to report the scam in hopes of fraud assistance.
Reset Accounts Compromised by Scammers
Scammers who gained access to your online accounts or financial sites should prompt an immediate password reset. Generate new secure passwords for each account the scammers accessed.
Turn on two-factor authentication wherever possible for an added layer of account security. Two-factor requires entry of a random security code from your phone when logging in from an unrecognized device.
Monitoring account activity is also critical following a scam. Review statements carefully over the next several months and report any fraudulent transactions promptly to reverse damages.
Placing a 90-day fraud alert with Equifax, Experian and TransUnion also helps prevent scammers from opening unauthorized accounts in your name. Alerts require creditors to verify your identity before approving applications.
Rehabilitate Compromised Personal Information
Scammers may sell or trade your personal information on the dark web following a successful scam. Information like SSNs, dates of birth, and driver’s license numbers may end up for sale on black market sites.
To help prevent identity theft, consider enrolling in identity theft protection services that monitor for misuse of your personal information. Services like LifeLock alert consumers if their information surfaces on the dark web or gets used for fraudulent applications. Monitoring helps halt damages from a potential data breach.
You can also place a free credit freeze with each of the three credit bureaus. Freezes restrict access to your credit reports and prevent scammers from opening fraudulent accounts. Just remember to lift the freeze when pursuing legitimate credit or loans yourself.
Protecting Yourself from Student Loan Forgiveness Scam Calls
While reporting and responding to scams quickly helps limit damages, your best defense is avoiding student loan scams in the first place. Here are smart steps you can take to recognize and evade student loan forgiveness scam calls:
Be Wary of Out-of-the-Blue Calls
An unexpected call claiming you qualify for loan forgiveness should immediately raise red flags. As a general best practice, approach any unsolicited call claiming you qualified for a government program with skepticism.
Legitimate student loan servicers communicate program qualifications via mail or within your online account portal. Offers over the phone promising instant loan forgiveness are almost assuredly scams. Don’t take the bait.
Verify the Caller’s Identity
Take steps to validate the identity of any caller claiming to represent the Department of Education or your student loan servicer. Ask for a call back number, full name, and employee ID number for verification.
Call your loan servicer directly to validate the representative and offer details. Confirm any forgiveness approval via your online account before proceeding. This option is available to review in both the FSA and loan servicer’s online portals.
If callers get defensive or cannot provide verifiable details, hang up immediately. Real representatives will understand your need to authenticate their identity before discussing account details or making payments.
Never Pay Upfront Fees
Keep in mind government programs like Public Student Loan Forgiveness and Borrower’s Defense do not require upfront payments or fees. Avoid paying over the phone, especially through instant money transfer methods.
Insist on validating qualification for forgiveness officially through your loan servicer account first. If payments are ever required for a federal program, remit via your online account portal or mail an official check.
Also realize student loan debt can only be forgiven by the federal government and your lender. No other entity or agency can legally forgive or eliminate your loans. Don’t pay anyone an upfront fee claiming otherwise.
Register Your Number on the Do Not Call List
Reduce unwanted scam calls by registering your phone number with the National Do Not Call Registry. While scammers still may call, you can report violators for added deterrence. Political calls, charities, and debt collectors may still get through.
You can also download call blocking apps from your phone carrier or third parties like Nomorobo. Apps identify known scam numbers and block calls automatically on your behalf. Just beware potential fees associated with call blocking services.
Stay Informed on Current Scams
Keep up with the latest student loan scams highlighted by the Federal Trade Commission and Department of Education. Knowing current fraudulent tactics helps recognize red flags quickly during scam calls.
You can even receive scam alerts directly from the FTC by subscribing to their email newsletter. Immediate notification on new schemes aids fast identification before falling victim.
Avoiding the student loan forgiveness scam robocalls requires applying healthy skepticism to any outreach promising fast loan forgiveness. Verify legitimacy directly with your loan servicer and never pay upfront fees to third-parties claiming to expedite forgiveness. Report scammers immediately to protect yourself and prevent perpetuation of this fraud.
Frequently Asked Questions About the Student Loan Forgiveness Scam Calls
What is the student loan forgiveness scam?
The student loan forgiveness scam involves fraudsters robocalling borrowers claiming their student loans have been pre-approved for forgiveness. The calls urge borrowers to contact fake “student loan officers” who then request upfront fees of $200 to $1000 to process forgiveness applications. After collecting fees, the scammers disappear without submitting any actual forgiveness paperwork.
How do scammers get borrowers’ contact information?
Scammers obtain lists of student loan borrowers’ names, phone numbers, and loan details from shady online data brokers, corrupt insiders at loan servicers, phishing schemes, and past scam victims. They use this data to make personalized scam pitches.
Are the calls really from my student loan servicer?
No. Scammers fake caller ID information to make it appear the calls are from the Department of Education or legitimate loan servicers. The numbers are typically spoofed. Always independently look up and call your servicer to verify any claims made over the phone.
How can I tell if a call is a scam?
Be wary of unsolicited calls claiming immediate loan forgiveness, especially if they request upfront fees. Confirm qualification through your online student loan account. Ask for call back numbers and employee IDs you can verify with your servicer. Scammers get defensive when questioned on legitimacy.
What should I do if I already paid scam artists?
If you fell victim, act quickly to minimize damages. Report the fraud to the FTC. Dispute credit/debit charges made to scammers. Reset any account passwords compromised during calls. Consider credit freezes, fraud alerts, and identity theft monitoring to protect your information.
How can I reduce scam robocalls?
Register your number on the National Do Not Call List. Use call blocking apps offered by carriers and third parties. Subscribe to FTC scam alerts so you’re aware of the latest tactics. Avoid answering calls from unfamiliar numbers. Let unknown callers leave a voicemail first so you can research the number.
Are there legitimate student loan forgiveness programs?
Yes, the Department of Education does offer programs like Public Student Loan Forgiveness, Borrower’s Defense Against Repayment, and Teacher Loan Forgiveness. But borrowers apply and manage these programs directly through the FSA website or their loan servicer – not random phone calls.
Who can I contact about these scam calls?
Report scam calls to the FTC, your state attorney general, phone carrier, and through social media warnings. The more reports filed, the better chance of identifying and stopping scammers and preventing other victims.
Conclusion
Student loan scams represent a dark side of the student debt crisis – fraudsters preying on the vulnerability of debt-burdened borrowers. Losing hundreds or thousands of dollars to scammers only exacerbates borrowers’ financial hardships.
Thankfully, armed with insights into the scam processes and smart precautions, borrowers can protect themselves. Check credentials, verify information, and report scams promptly. And explore legitimate student loan repayment and forgiveness programs offered by the Department of Education.
With extra vigilance and prevention, hopefully the scammers will come to realize student loan borrowers are no longer easy targets. Only time will tell if regulators can successfully curb illegal robocalls in their entirety.
Until then, spread awareness so fewer people fall victim. Keep an ear out for phantom student loan forgiveness calls and encourage others to hang up the phone. An informed public represents the most formidable defense against predatory student loan scams.
