PHOENIX — Federal student loan repayments are in limbo through the end of the summer, and experts say scammers are using that time to trick you into putting money in their pockets.
The moratorium on federal student loan repayments is set to end Aug. 31, but many borrowers are waiting to see if that pause is extended again, or if President Joe Biden unveils a plan to cancel at least some federal loans.
Borrowers who took advantage of the more than two-year break probably haven’t checked their loans in some time and may not be aware that their loan managers may have changed during that time.
This makes pickings easier for scammers; they know there is confusion and they try to take advantage of it.
Mary Jo Terry with private student loan refinancer Yrefy tells ABC15 they see a lot of scammers trying to charge people to fill out federal loan paperwork or trying to get personal information from borrowers.
“[Borrowers] get calls saying ‘Hey, we can get your loans canceled or waived…give us X dollars, give me your credit card number and I can take care of it for you,’” said Terri.
Your personal and financial information is a red flag, Terry said. No one should ask for this over the phone, and you would not pay for any information related to federal programs.
“Believe it or not, some of these scammers are spoofing 800 numbers from real lenders, so be careful and know who your loan manager is,” Terry said. “If you get a phone call and you think it’s your loan officer, your loan officer already has your personal information. Your loan officer has your date of birth, social security number, and all of your address information like that, so be really aware if someone asks you about it.
Terry said it’s important to know who your loan provider is because it might have changed and exactly how much you still owe and whether you qualify for government rebate programs.
If you’re not sure, visit studentaid.gov to register now before the break even ends.
Meanwhile, President Biden is reportedly close to making a decision on whether to cancel the federal loan, although the White House has said no formal decision has been made.