How to Avoid Student Loan Scams: Voicemails and RobocallsOctober 29, 2019
Updated February 9, 2021
Robocalls. They’ve become so common and irritating that we rarely answer our phones if we don’t recognize the number. The voice messages these scammers leave range from humorous to threatening – from the “local police” waiting to take you into custody, to a stranger offering cash for your home.
A recent string of messages hits particularly close to home for the 45 million U.S. borrowers who owe $1.5 trillion in student loans. These calls claim changes to federal student loans or advertise offers of forgiveness of student loan debt. Some people who find these messages in their voicemail don’t even have student loans. But for the 45 million Americans who do, the offers can be a little too tempting. Student loan debt is a burden that we want to find a way out of and sometimes, what sounds to be too good to be true is in fact that. So much so, that we’re willing to put on earmuffs when it comes to a quick way out.
These scammers are after social security numbers, credit card numbers, federal student aid IDs, or for a victim to contribute money to a loan assistance program that (surprise, surprise) has no intention of helping you with your student loans. A reputable company will never ask for any of these things over a voicemail or on the phone.
So how are borrowers supposed to know what offers to be wary of? Let’s run down a list of common tactics for student loan voicemail scams.
Student Loan Scam Tactic #1: Student Loan Debt Relief or Forgiveness For an Upfront Fee
This tactic is just what it sounds like: fraudsters offering to completely do away with your student loan debt. The scam is tricky because there are federal loan forgiveness programs that pay the balance of your loan under certain circumstances, like if you join the military or qualify and meet the requirements of the Public Service Loan Forgiveness (PSLF) program. We’ve outlined how the PSLF program works in a previous blog post.
The offer from the scammer usually sounds something like, “we’ll release your student loans for a nominal, upfront fee.” The red flag is the advance payment – something legitimate organizations would never do. It’s actually illegal for companies to make you pay before helping you.
This claim is even more suspicious when they offer “quick” student loan forgiveness. In actuality, the Public Service Loan Forgiveness program takes years to complete and includes detailed requirements for qualifying. To put it simply, if you have student loan debt, you must repay that debt. If you are having a challenge repaying your student loans, contact your lender or a reputable resource focused on assisting people in your situation.
In fact, student loan servicers will often help you with several things at no cost, including:
- Answering questions about your student loans
- Assisting with collecting your student loan payments
- Provide information about their student loan options to help you find the plan that best fits your needs
- Help you change your student loan repayment plan
Student Loan Scam Tactic #2: They Offer “Exclusive” Access
Some voicemails promote programs for reducing student loan monthly payments or even your total balance as part of an exclusive offer. However, companies who have your real best interest at heart would never make promises or offers without first knowing your personal financial situation.
Student Loan Scam Tactic #3: They Convince You to Act Quickly
These student loan voicemail scams work by telling you to call back “right away” or risk losing your offer. But you should never be pressured into an offer. You student loans will remain subject to your existing agreements with your student loan lender unless you take action to change them, such as by refinancing your student loans with a new lender. Don’t feel pressured to make a choice now. A company can only propose different rates or terms based on your applying for a new program. Take your time and do your research on who is making the offer and determine if they are a reputable organization with experience in student loans and student loan refinancing.
Student Loan Scam Tactic #4: They Use Political Buzz For Power
For borrowers with federal student loans, scammers sometimes claim transitions in presidential administrations have ushered in changes to student loan laws, for example, the switch from the Obama to the Trump administration. Scammers get fuel from the fact that many politicians are currently talking about student loan debt. They believe borrowers will get confused between the different proposals and plans and assume they’ve heard of the offer. Once you’ve given them your data, they have all they need.
Student Loan Scam Tactic #5: They Claim to Be From a Government Agency
Some scammers will try to make themselves appear more legitimate by pretending to be a trusted government agency. It’s important to remember, however, that the Department of Education never authorizes organizations other than your student loan servicer to handle your federal student loans.
If you aren’t sure whether a call is legitimate or not, simply call your student loan servicer at their direct number – not the number provided in the suspicious call – to verify whether a communication came from them.
Student Loan Scam Tactic #6: They Tell You That You Can’t Do It Without Them
This is the classic scammer line: you need me or else you will miss out on this great opportunity. We hate to break it to those scammers, but there’s nothing that they offer that you can’t do on your own – for free. You can explore lowering your student loan interest rate, negotiate new loan repayment terms, and even try to qualify for PSLF all on your own, without paying a company to assist you.
Student Loan Scam Tactic #7: They Request Sensitive Personal Information
Scam companies may try to trick you into giving them sensitive personal information by pretending to be a familiar financial institution. In these cases, scammers may use the information they gather to try to steal your identity and open credit accounts in your name. Remember that your bank, financial institution, or lender will never call or email to ask you for that information.
Student Loan Scam Tactic #8: They Want You to Give Them Power of Attorney
Some scammers will even ask you to sign a third-party authorization form or to give them power of attorney. By agreeing, you may accidentally authorize them to speak with your student loan servicer, make decisions on your behalf and change your student loan information without your knowledge.
No legitimate company will ever call or email you unprompted to ask you to sign away your power of attorney. If you receive a call like this, hang up immediately, and if you believe you may have accidentally given away sensitive information, be sure to let your lender know right away.
How to Avoid or Stop Student Loan Scam Calls
Now that you know what phony offers are out there, there’s one simple way you can avoid scammers: don’t answer the phone and don’t call them back.
- If you do answer the phone—and realize it’s a robocall—hang up and don’t push any buttons or engage in conversation. This is one situation where you should push manners to the side and get off the line as quickly as possible.
- Do your research into who is calling you and reach back out to them through the official phone number from their website if necessary.
- Remember, anyone can build a website. Make sure you validate a student loan company is authentic by looking for indicators, such as sufficient user reviews on reputable sites and a listing on the Better Business Bureau.
- Do not share your phone number except with trusted individuals. Don’t put your phone number on social media, or even share it with companies for their customer loyalty programs if possible. The more places you share your phone number, the greater the possibility that you may receive suspicious phone calls.
- Add your phone number to the National Do Not Call Registry. While you may still receive calls from nonprofits, political groups, etc., most commercial companies will not call if your number is included on this list. Then, if you receive a suspicious phone call, you’ll know it’s likely to be a spammer.
- You can download several different apps that block robocalls. This is a simple and effective way to prevent unwanted phone calls.
- Report any suspicious activity to your lender immediately. Especially if you think the scammer may have collected some of your personal information, it’s best to make your student loan servicer aware.
Companies That the FTC Has Taken Legal Action Against
The U.S. Department of Education has outlined steps you can take to avoid student loan scams and listed companies they’ve taken legal action against.
Here are a few companies to keep an eye out for:
- A1 DocPrep, Inc.
- American Student Loan Consolidators (ASLC)
- Alliance Document Preparation
- Student Aid Center
- Strategic Student Solutions
- Student Debt Doctor (SDD)
- Student Debt Relief Group (SDRG)
What to Do If You Are the Victim of a Student Loan Forgiveness Call Scam
Student loan scams are common, and it can be easy to fall for them. If you find yourself the victim of a scamming or phishing attempt, here are a few steps you can take to get help:
- Let your student lender, bank and credit card company know right away. That way they can flag any questionable communications or purchases if they happen.
- Report the call to an agency that protects consumers against these types of scams. Examples include the Consumer Financial Protection Bureau, the Federal Trade Commission and the state attorney general’s office.
- Keep an eye on your credit report for suspicious activity.
- Change your passwords, especially those that protect sensitive financial information.
Safe Ways to Get Student Loan Counseling, Forgiveness or Relief
If you can’t afford your student loan payments, there are several legitimate sources you can reach out to for assistance. Here are a few ways you may be able to request help for your student loans:
- Apply for an Income-Driven Repayment plan to lower your monthly student loan payment.
- Speak with your student loan servicer about student loan forgiveness options.
- Consolidate your federal student loans and extend the repayment term to 30 years to decrease your monthly payment.
- Reach out to an organization like the National Foundation for Credit Counseling (NFCC) for student debt counseling.
- Explore student loan refinancing to see if you may be able to lower your interest rate or monthly student loan payment.
If you’re looking to consolidate or refinance your student loans for a potentially lower interest rate or new repayment terms, the team at ELFI* can walk you through the entire process and help you decide if it may be right for you.