Student loan repayments return and so do scammers

COLUMBIA, Mo. (KMIZ)

Student loan repayments have begun this month for the first time in three years, and officials are warning borrowers to beware of scams.

Sarah Wetzel with the Better Business Bureau said scammers are taking advantage of the fact that student loan forgiveness has been in the news, with President Joe Biden's attempts to forgive student loan debt.

"We know that there is no repayment from the government," Wetzel said. "So, anybody that's reaching out to you saying that they're able to get you any kind of repayment or forgiveness of your loans, you just have to be careful."

She said when scammers offer lower payments or loan forgiveness, it comes with a price.

However, people will never need to pay to sign up for legitimate payment or forgiveness programs. The FTC says that is all free at studentaid.gov/repay, and the best source of information about student loan repayments is federal student aid.

Some red flags to determine if a student loan offer is a scam include:

• Needing up front payments
• Aggressive advertising language, such as "act now"
• Asking for login information such as an FSA ID
• Unsolicited phone calls or emails
• Typos in the name of the program, contact information or throughout the message

"They want you to sign up right then over the phone," said Katherine Aizpuru, an FTC Bureau of Consumer Protection attorney. "They don't want you to take time and think through your options or talk through it with your loved ones. They want you to hand over your bank account or your FSA log in right now."

The FTC warns not to trust anyone who promises debt relief or loan forgiveness, even if someone says they are with the Department of Education. It warns scammers often imitate official organizations with names and logos.

The Department of Education's Federal Student Aid Office says emails from its personnel will only come from:

• noreply@studentaid.gov
• noreply@debtrelief.studentaid.gov
• ed.gov@public.govdelivery.com

If someone is unsure if they have been approached by a scammer, Wetzel said people should contact their lender or Federal Student Aid directly to see if an offer is true.

"It may take months or years before (consumers) realize that they're paying into a scammer," Wetzel said. "They look to see how much they've paid off on their loan, and they realize no payments have actually been going toward their loan. They've just been giving this money to a scammer."

If someone has been scammed, Federal Student Aid says people should contact their federal loan servicer to make sure nothing happened to their account, contact their bank or credit card company and submit complaints to Federal Student Aid, the FTC or the Consumer Financial Protection Bureau.