Student loan debt relief scams on the rise
The typical federal student loan balance is more than $37,000
(InvestigateTV) — Americans owe more than $1.7 trillion in student loan debt, according to the Education Data Initiative, making borrowers prime targets for debt relief scams.
U.S. Department of Education Assistant Inspector General for Investigations Jason Williams said student loan debt relief scams can come in many forms.
“They’re using social media. They’re listening to the newscasts that are talking about, you know, student loans and people are, you know, dealing with their debts,” Williams explained. “And they’re trying to take advantage of these things.”
He said some of the most common tactics fraudsters employ are unsolicited text messages, emails, telephone calls, and even direct mail through the U.S. Post Office.
“What they’re trying to do is they’re trying to, you know, get you to provide your information, especially for fee,” Williams said. “Which, you know, the Department of Education Office of Federal Student Aid will never charge you a fee to use their services.”
Williams said they have noticed an uptick in student loan forgiveness and debt relief scam complaints since 2022. It’s why they’re working hard to alert the public.
“We’ve had some really successful investigative activity. One of the cases that we just finished up is in California. Where you know a student, a company that was posing that they were loosely affiliated with the Department of Education was saying they could help borrowers, you know, reduce or, you know, get rid of their loans. And that simply wasn’t true,” Williams noted. “They were charging a fee to these people up to $1,300 and what they were doing was they were logging into peoples’ accounts, sharing their FSA ID, which you’re absolutely never to do and you know, using that information for their own means and a lot of people unfortunately missed student loan payments. They had, you know, interest added to their account and also some people defaulted on their loans.”
The fraudsters eventually received prison time and hundreds of dollars in restitution were given out to those victims.
Williams urged anyone who thinks they may have been a victim of a student loan scam to immediately reach out to their servicer at the Office of Federal Student Aid at StudentAid.gov.
Scams can also be reported to Office of Inspector General hotline that operates 24 hours a day.
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