Student loan scams plague borrowers awaiting forgiveness: NPR

Hands tied by a telephone wire

After President Biden announced his sweeping student loan forgiveness plan in August, borrowers flooded the studentaid.gov website for information on what to do next. For many of them, the answers weren’t particularly satisfying: sign up for an email alert and wait for the app to be released in early October.

Carolina Rodriguez says she’s already getting emails from anxious customers worried about having their debts forgiven before student loan payments resume in January. She is director of the Education Debt Consumer Assistance Program in New York.

“The stress is about to hit. Over the weeks the stress is going to be real,” she says.

And that stress has left an opening for scammers.

“It’s a ripe environment for scammers to really get to grips with that kind of desperation,” says Katie Paul, director of the Tech Transparency Project, or TTP, a nonprofit that monitors tech companies.

Scams were a problem even before Biden’s announcement. According to a July TTP report, more than 1 in 10 Google ads for searches for student loan forgiveness were fraudulent. And while new data isn’t yet available, experts tell NPR the problem has escalated in the weeks since Biden’s big reveal, with borrowers encountering scams in text messages, phone calls and emails. emails. There is even a gray area of ​​legitimate companies asking borrowers to pay for student loan services that should be free.

Education Secretary Miguel Cardona says he is aware that “there are bad actors out there”. He recently told NPR that his advice to borrowers is simple: “Go to our website studentaid.gov/debtrelief for information and don’t go anywhere else. Don’t open these emails. Don’t .”

But promising borrowers debt relief and then asking them to hold out for more than a month has left many people vulnerable to fraud.

When asked why the administration didn’t wait to announce the program until demand was ready for borrowers, Cardona said, “We couldn’t create demand if it didn’t have was a policy that the president would have put forward.”

As the government now takes the time to develop the scheme, experts say borrowers are exposed from all sides: text messages, emails, advertisements and phone calls.

Borrowers receive scam ads when seeking loan forgiveness

Finding information on student debt relief, even before Biden’s announcement, was tricky. According to a July report from the TTP, 12% of Google ads that appeared in searches for key terms relating to student loan forgiveness were fraudulent.

TTP uses Google’s advertising guidelines to determine what is and what is not fake. Asking for personal information or payment before providing a good or service is one of the most common red flags.

In the organization’s next report, Paul says, “we’re almost certain to see an increase in these fraudulent advertisements” around loan forgiveness. “Not only because it’s front and center and scammers like to take advantage of this opportunity, but we’re also seeing an increase in people searching for this content.”

Although TTP says it alerted Google to the high level of fraudulent ads in July, the group says it discovered some of the same fraudulent ads were appearing after Biden’s announcement in August.

“We are seeing dozens of advertisements slipping through the cracks, which can have real serious and material consequences for people who trust this great company and its search engine to provide authoritative information,” says Paul .

When asked to comment, a Google spokesperson said, “We have reviewed the ads in question and removed any that violate our policies.”

The company also said it is “committed to fighting financial fraud in advertisements and protecting consumers from scams.”

Scammers phish borrowers through emails, text messages and phone calls

Borrowers searching for information and finding scams are one thing, but scammers also search and find borrowers.

Hank Schless of mobile security company Lookout says borrowers should monitor their email inboxes, text messages and unwanted calls. Also: Beware of anything with a time limit. Scammers often try to convey a sense of urgency, sometimes with false urgency, to access information.

“All of a sudden, you might give out your name, your address, your credit card information, your social security information,” says Schless. “There are a lot of things related to [student loans]that’s why they’re really being hammered so hard by the bad guys right now.”

Scammers can also take advantage of official email alerts that borrowers have come to expect, sending emails purporting to be from the US Department of Education. Schless says there are easy ways to check if an email is real.

“The thing you always want to do is validate the sender,” he says. “The reason these [scams] succeed in targeting mobile users because Gmail or Apple Mail or other [email app] you use some sort of consolidation of the sender’s email address and only show their name most of the time.”

Schless says anyone can claim being the US Department of Education, but not everyone has access to a .gov email address. In order to validate the email, borrowers must click on the name to view the actual address.

Back in New York, Carolina Rodriguez says most of her clients have been scammed over the phone rather than email.

She recently received a call from a borrower who told her she needed Rodriguez’s help to access her student loan account because a caller had promised to get her loan forgiveness immediately. “No, it’s not,” Rodriguez told the Borrower, “and let me explain.”

Student loan services should be simple

Another concern is when semi-legitimate companies try to convince borrowers to pay for student loan services they don’t need.

“It’s borderline fraud because no one should have to pay for a loan,” Rodriguez says. “But we’ve had clients say, ‘Yeah, I went to a lot of webinars and then they wanted $400 or $600 to fill out the form. “

Inviting borrowers to webinars, promising to get their loan forgiven if they use their service – Rodriguez says these are the hallmarks of companies profiting from the student loan industry. They are legitimate because they provide a service, but it is a service that borrowers, in most cases, do not need.

Rodriguez reminds his clients that when the loan forgiveness application comes out, it won’t be necessary for a company to fill it out.

Secretary Cardona agrees. He says the department will make the process simple and quick, “we recognize that user experience is important.”

The application should be the easy part; the hard part is the waiting game.

Cory Turner contributed to this report.

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