Greg's Corner

Scammers Target Student Loan Restart

By Greg Collier

There’s already enough confusion about student loan relief, or the lack thereof, without scammers adding to the chaos. As of May 5th, the federal government has resumed the collection of defaulted federal student loans for the first time since March 2020, when payments were paused due to the COVID-19 pandemic. In response to this change, the Better Business Bureau is warning Missouri residents to be on alert for scams targeting borrowers.

According to the Better Business Bureau (BBB), scammers are exploiting the current uncertainty by contacting borrowers with misleading offers that claim to provide quick or guaranteed student loan forgiveness. These schemes may appear convincing and often pressure borrowers into handing over personal information or paying unnecessary fees. The BBB urges borrowers to remain cautious and avoid trusting unsolicited calls, emails, or texts about loan repayment options.

One way to reduce the risk of falling victim to these scams is by securing an FSA ID through the official Federal Student Aid website. This helps ensure direct and secure communication between borrowers and the government, rather than third parties posing as legitimate servicers. The BBB also emphasizes the importance of using official websites and verified sources when exploring loan repayment or refinancing options.

Borrowers are advised not to pay for debt relief services and to be skeptical of any company making bold promises about eliminating student loan debt. Scammers often count on confusion and urgency to convince people to act quickly, especially as collection efforts resume after a long hiatus.

The BBB’s warning serves as a timely reminder that diligence is essential. Staying informed and cautious is the best defense against fraud as the student loan landscape continues to evolve.