By Randy Hutchinson
President of the BBB of the Mid-South
Reprinted from The Jackson Sun
Benjamin Franklin said "nothing is certain except death and taxes." If he was alive today, he might add "and student loan debt relief scams."
In a coordinated enforcement action in 2017 called "Operation Game of Loans", the FTC and partner law enforcement agencies cracked down on 36 companies that had scammed student loan borrowers out fo more than $95 million in upfront fees with bogus promises to help get their loans reduced or forgiven. Just last month, the agency sent 14,521 refund checks totaling more than $822,000 to student loan borrowers victimized in a scheme that operated under the name Student Advocates.
So it was inevitable that scammers would seek to take advantage of the recent announcement by President Biden that hundreds of billions of dollars in students loans will be forgiven and payments on many loans will continue to be deferred. The FTC has issued a warning about scams and we're already getting reports to our BBB Scam Tracker service about scam calls and texts.
Elements of the messages include:
The Department of Education is still working on the details of the forgiveness program - who's eligible, how to apply to get student loan debt canceled, and so on. And there's a strong possibility the program will be challenged in court, further delaying and perhaps even forestalling loan forgiveness altogether.
In the interim, the FTC and BBB offer these tips to avoid becoming the victim of a student loan forgiveness scam:
Don't assume a call is legitimate just because you have a student loan. I've never had a student loan but regularly get calls offering to help me reduce or eliminate my loan balance.
You can visit the Department of Education's website to sign up to receive updates on the debt forgiveness program.