How to protect against student loan fraud
LAS VEGAS (KLAS) — Extending the federal student loan repayment pause until the end of August has given borrowers more time to prepare, but it has also opened up opportunities for scammers.
8 News Now got critical insight from a student loan debt scam expert on what Nevada borrowers need to know.
“We see this every week, we’ve even seen one company spoof another company’s 1-800 number, and it shows up on your caller ID as if it’s your lender,” Mary Jo said. Terry, managing partner of YREFY.
Terry helps raise the alarm against scammers by taking full advantage of the confusion borrowers may have regarding their student loans.
“The most important thing is ‘hey, I see you were previously on direct debit, let’s update your bank account information,'” she added.
This is where the confusion comes in: During the COVID-19 pandemic, the CARES Act deferred federal loans and interest-free repayment. This refund extension continues to be pushed back.
Loan servicers have changed, and scammers are banking on the fact that borrowers haven’t accessed their own accounts for the past two years.
In Nevada, borrowers have racked up about $26 billion in student loan debt.
If you’re one of those borrowers, Terry said, you need to go to studentaid.gov, log in, update your profile information, and find out who your loan manager is.
If someone tries to get in touch with you, you will know what your balance is and you won’t fall for any of these scams. But if you already did, here’s what she said you need to do now.
“If you’ve given out personal information that you think someone might open a credit card in your name for example, or some kind of line of credit, let the credit bureaus know,” she advised. “You can do everything online, they have 1-800 numbers, just set a fraud alert, it won’t cost you anything, it won’t hurt you, and if anyone tries to do something harmful, you will be warned.”
If someone contacts you, let your loan officer know and remember that federal program enrollment is free, forms and assistance are free.