Student loan debt relief scammers target worried borrowers
OF THE DEPARTMENT OF AGRICULTURE, TRADE AND CONSUMER PROTECTION OF WISCONSIN
The definitive extension of the federal student loan payment break runs until January 31, 2022. The Wisconsin Department of Agriculture, Commerce, and Consumer Protection (DATCP) and the Wisconsin Department of Financial Institutions (DFI) encourage student loan borrowers to be wary of offers from dubious student loan debt relief companies, to be aware of fraudsters taking advantage of this transition period, and to create a repayment plan now before their student loan payments are due.
âStudent loan debt relief scammers are targeting borrowers with bogus offers of loan cancellation or savings through consolidation,â DATCP Secretary Randy Romanski said. âThere are many resources that consumers can access without paying a fee. I encourage borrowers to use DFI’s resources for information on repayment services and to report any fraud to our DATCP team.
“With the resumption of student loan repayments in February 2022, it is more important than ever for borrowers to explore their student loan repayment options and establish a repayment plan today,” the secretary said. DFI, Kathy Blumenfeld. âBorrowers should take the time now while payments are still paused to review repayment options such as income-based repayment plans, which reduce monthly payments, and verify their eligibility for student loan cancellation. . Not waiting until the last minute to make a plan is important and will help ensure a smooth return to repayment. “
Student loan borrowers should beware of phone calls, emails, letters, and texts calling for federal student loan relief or warning that student loan cancellation programs expire immediately. These aggressive solicitations are used to defraud borrowers with fees for services that are often free, and can be used by fraudsters to steal their money and identity.
Signs of a fraudulent student loan debt relief company:
- The initial costs – These types of fees are prohibited for loan service providers. Do not provide credit card numbers or bank account information.
- Promises of immediate total loan forgiveness – Most government forgiveness programs require many years of qualifying payments and / or employment in certain areas before loans can be forgiven.
- FSA ID username and password requests from a borrower – A borrower’s FSA identifier has the same legal status as a signature, it can be used to make changes to the borrower’s account without their knowledge. Do not share a borrower’s FSA ID.
- High pressure sales phrases – Fraudulent student loan debt relief companies often attempt to instill a sense of urgency by citing “new laws” or “program disruptions” as a way to encourage borrowers to contact them immediately.
- Third Party Authorization Form or Power of Attorney Requests – Debt relief scammers often want these permissions to change the borrower’s contact information so they won’t be notified when the loan officer stops paying the student loan bill.
- Spelling or grammar errors – Communications containing misspelled words or grammatical errors often indicate that the communication is likely from a scammer and should be deleted.
Student loan borrowers can find free repayment resources at DFI LookForwardWI.gov website, including the Wisconsin Strong Student Loan Repayment Tool provided by student loan experts at Savi. This tool helps student loan borrowers navigate the complexities of federal student loan repayment plans, forgiveness programs and reduced student loan payments. To learn more, visit WStrong.BySavi.com and Register now to attend Savi’s free workshop on December 1, 2021, 6 p.m. to 7 p.m. CST.