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Student Debt Scammers During COVID-19

The COVID-19 pandemic has brought many unintended consequences that have affected our way of life. Along with the health-related concerns we have been watching closely there have also been economic repercussions that have affected the global economy, and is pointing towards a recession. And as if that was not enough, scammers are now taking advantage of the pandemic to prey on and defraud consumers. A financially vulnerable population they have been targeting are student loan borrowers.

In this article, we will explain what COVID-19 student debt scams to look out for and how you can protect yourself.

COVID-19 Student Loan Scams

Scammers are taking advantage of the situation to defraud student loan borrowers. Some are offering debt relief or to switch repayment plan in exchange for a fee. Others are offering to suspend your monthly payments due to the coronavirus in exchange for personal information. Watch out for any of these scams, and don’t share your personal information with anyone pretending to be your loan servicer. There is no such thing as instant loan forgiveness, the closest there is the PSLF program in which your debt is erased after working for 10 years in the public sector. Similarly, your loan servicer will not ask for a fee to provide help, and all federal student loans have suspended payments and cut interest rates to 0% until September 30.

What you can do to protect yourself?

Do not accept help if you are contacted by someone pretending to be your loan servicer offering unsolicited assistance and/or asking for upfront fees or personal information. All federal student loans have been automatically placed in forbearance with a 0% interest rate until September 30, and borrowers do not need to take any action to suspend payments.

Other tips by the Federal Communications Commission (FCC) to stay safe from the scammers include:

  • Do not respond to calls or texts from unknown numbers, or any others that appear suspicious.
  • Never share your personal or financial information via email, text messages, or over the phone.
  • Be cautious if you’re being pressured to share any information or make a payment immediately.
  • Scammers often spoof phone numbers to trick you into answering or responding. Remember that government agencies will never call you to ask for personal information or money.
  • Do not click any links in a text message. If a friend sends you a text with a suspicious link that seems out of character, call them to make sure they weren’t hacked.

Most common scams to look out for during the COVID-19 pandemic

Other types of scams that have surged during the coronavirus crisis that may or may not be related to student loans include:

  • Imposters offering warnings, virus updates or information on vaccines, claiming to be with the Centers for Disease Control (CDC) or World Health Organization (WHO)
  • Promotions claiming that the products or services of publicly-traded companies can treat coronavirus and as a result, their stock will increase in value
  • Calls asking you to provide personal information such as banking details and/or social security number to receive your stimulus check
  • Phishing emails or calls related to fake coronavirus testing kits
  • Stores claiming to have restocked cleaning and disinfecting supplies of big-name brands

It’s important to know that most of these scammers will ultimately try to obtain your personal information in exchange for products and/or services. In some cases, they might redirect you to download malware by clicking on links or email attachments.

For more information on other types of student loan scams, you can refer to our article on student debt scams.

If you suspect a scammer has contacted you, or have fell victim to a scam you can report them using the Federal Trade Commission Complaint Assistant.

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