The pause on federal student loan repayments is set to expire at the end of the summer. While this may be good news for borrowers, it creates opportunities for scammers.
PENNSYLVANIA, USA — Federal student loans for more than 43 million borrowers across the United States are now frozen until August 31.
“The good news is that no interest has accrued on these accounts,” said Mary Jo Terry, managing partner at Yrefy. “The bad news is that it’s been two and a half years”
Since the start of the COVID-19 pandemic, the Trump and Biden administrations have repeatedly extended the moratorium on loan repayments.
While this may be a respite for many, it’s also a spelling issue.
“What we’re seeing is more and more people trying to scam federal borrowers and also reaching out to people who don’t even have a student loan,” Terry said.
Terry has worked in the education industry for over two decades.
She says scammers use phone, text and email to try to trick borrowers.
“They’re trying to say, ‘Hey, give me some money, give me $399, and I’ll cancel your loans, or I’ll cancel your loans,'” she explained.
While the White House says canceling at least some student debt is still on the table for President Biden, nothing has been decided yet.
“Anything about forgiveness or rescission is going to be big news,” Terry said. “This is going to be all over the media so trust your sources of information. You will also likely be contacted by your loan manager if you are eligible.
Experts say that if someone is asking for money or personal information, such as social security or bank account numbers, it’s most likely a scam.
That’s why you always need to know who your loan manager is and what your exact loan balance is.
“That way you know if they ask you for your loan balance they should be down to the penny, to the dollar, they should have that information.”
And if you are a victim, you should contact your service agent, bank, and credit bureau and ask them to help you.