Student loan borrowers at risk of scams as payments restart, says FTC

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Student loan payments are restarting in October after a pause of more than three years — and scammers try to take benefit, the Federal Trade Commission warned Thursday.

Fraudsters could strive mislead borrowers by providing help and asking them to pay for it, Ari Lazarus, shopper schooling specialist at the FTC, wrote in a consumer alert. Those pretend gives may embody decreasing borrowers’ month-to-month payments, avoiding reimbursement or getting their loans forgiven.

“Worried about repaying your loans? The calls and texts that supply ‘assist’ may be tempting,” the alert stated. “But earlier than you act, know how you can spot the scams.”

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The suspension of federal pupil loan payments began in March 2020, one of many tranches of authorities help meant to alleviate monetary pressures on households at the onset of the Covid-19 pandemic.

The pause has since been extended eight occasions, twice by the Trump administration and 6 occasions by the Biden administration. Interest on federal pupil debt was additionally suspended throughout this era however started accruing again on Sept. 1.

The “finest supply” of data on federal pupil loans is the Federal Student Aid web site,, the FTC stated.

The company supplied two tricks to keep away from falling sufferer to a rip-off:

  • Don’t give away your FSA ID login data. Only scammers will ask for this. They can reduce off contact between borrowers and their loan servicer, and even perhaps steal their id.
  • Don’t belief individuals who promise debt aid or loan forgiveness, even when they declare to be from the U.S. Department of Education. Special entry to reimbursement plans or forgiveness choices does not exist. Instead, log into your pupil loan account to evaluation your choices.

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