Student Loan Borrower Narrowly Avoids Forgiveness Scam

Student loan borrowers should be on the lookout as a new scam attempts to rob them out of thousands.

A woman told ABC News 5 Cleveland that she was targeted by a fraudster looking to get into her bank account in order for $10,000 in student debt to be forgiven.

The scammer reached her by phone and said she was eligible for a program to lower her student loan repayments.

“They were going to erase $8,260 and I would only have to pay back $1,080,” the anonymous woman told the local station. “That sounds good for me when you owe $10,000, you want to take advantage of that.”

The scammer even went as far as to get the woman’s bank card information, which then would give them access to all the money in the account.

The woman was fooled because the caller knew her full name and Social Security number.

When she realized the story didn’t add up, though, she immediately asked for a new card from her bank and avoided having her account hacked.

Kevin Thompson, a financial planner and the founder and CEO of 9i Capital Group, said no reputable company will ever require you to provide your banking information or personal data before they help you.

“If a company requires you to provide banking information or personal data prior to them actually helping you, you can rest assured that it is not a credible source,” Thompson told Newsweek.

Lindsay Bryan-Podvin, the founder of Mind Money Balance, said borrowers should always call any department or bank directly to make sure it’s legitimate.

“If your student loan servicer calls saying you qualify for forgiveness, take a note on the program’s name, ask them for their name and department, and then hang up,” Bryan-Podvin told Newsweek. “Call back your loan servicer, or the servicer they claim to be from and ask them about their process to apply for student loan forgiveness and ask what the steps are.”

While many scam victims feel they need to act immediately to claim debt forgiveness or protect their finances, waiting ensures that you don’t fall into a trap.

“These scammers rely on dysregulating your nervous system and preying on the intense stress that student loans cause individuals,” Bryan-Podvin said.

Any time student loan forgiveness is promised by an organization besides the FSA, you should doubt the claim and double check on your own terms, experts say.

“It’s not to say that state entities and schools themselves can issue student loan forgiveness at a certain level, but it would be documented on an official state or school website with a procedure that would involve that entity,” Alex Beene, a financial literacy instructor for the state of Tennessee, told Newsweek.

“Even if you receive an email by an organization claiming to be associated with a state or school entity, you need to reach out to the institution to verify. These scams have gotten more and more elaborate, and unfortunately, it’s more difficult now to spot what’s real versus what is not.”