4 Ways to Outsmart Student Loan Forgiveness Scams
Thieves are always looking for new ways to scam you. They often send phishing emails to trick you into clicking on malicious links that install malware on your device or steal your account credentials.
More brazen criminals will even have the courage to call you on the phone. They will spin an elaborate scheme hoping to scam you out of your money. If you fall for a scam, certain steps should be taken immediately. Tap or click here for details.
In this report, we are going to cover a few issues you need to be aware of. First, an education technology company left its database unprotected for anyone to see its data. Then the scammers piggyback on the student loan forgiveness to try and scam you. Keep reading for everything you need to know.
“Reckless” approach to cybersecurity
Studying for your dream career is a challenge and most students need all the help they can get. Educational technology company Chugg is one such entity, providing homework help through an app.
When you register, you must answer several questions and the data is stored on Chugg’s servers. In theory, the data should be secure, but the Federal Trade Commission (FTC) accuses Chugg of negligent behavior.
According to a legal complaint, the company issued root login credentials to several employees and some external contractors. This means that anyone with these credentials had unrestricted access to some of the company’s databases. It was an open door for unauthorized people.
The FTC says a former Chegg contractor used the details to access information from an Amazon Web Services database. The information includes the names, email addresses and passwords of approximately 40 million users.
According to The New York Times, details of the students’ parents’ religion, sexual orientation, disabilities and income were also taken. Some of the exposed data was found for sale online. Chugg is working with the FTC on a settlement for affected users.
Student loan scams
The next thing you need to be aware of is an elaborate scheme involving the recent student loan forgiveness program. Several victims informed the Better Business Bureau (BBB) of this scheme.
Here’s how it works. You receive a phone call from someone claiming to represent the student loan forgiveness program.
In many cases, scammers have a wealth of information they shouldn’t have, including the last four digits of your social security number, graduation date, and email address. One victim even reported that the thieves had information about their FAFSA account. Ouch!
The fraudulent representative claims he can help you get a student loan forgiveness. They even go so far as to claim that they can net you up to $60,000. That’s way more than the legitimate program offers, so that should be a red flag. But some get caught up in it.
According to the BBB, scammers claim that you have to pay an upfront fee to receive your student loan forgiveness. Fees are usually several hundred dollars spread over a few months, followed by smaller monthly payments. Then, your loan will be canceled at the end of the current loan cancellation program pause.
But don’t fall for the trap. It’s a scam! You do NOT must pay fees for the Official Student Loan Forgiveness Plan. If someone calls and asks for charges, hang up immediately!
There are other ways to thwart these patterns. The BBB gave some ideas.
How to avoid student loan forgiveness scams:
- If in doubt, contact the government agency directly. If you receive a message that seems legitimate but that you are not sure about, stop communicating with the person who contacted you. Then verify their claims by contacting the government agency they say they represent. For more details on the Student Loan Forgiveness Program, visit ED.gov Where StudentAid.gov.
- Never pay a fee for a free government program. Government agencies will never ask you to pay a fee for a free government program. Don’t let scammers convince you otherwise. The scammers may say that the fee will relieve you faster or unlock additional benefits, but that’s part of the scam.
- Think twice about unsolicited calls, emails or texts. Usually, government agencies will not contact you unless you ask. Impromptu communications are a red flag.
- Don’t give in to scare tactics. If someone says you’re going to miss something if you don’t act immediately, beware. This urgency is a common tactic that scammers use on victims. Instead of responding, stop communications until you can verify what they say is true.
If you come across a student loan forgiveness scam, report it. Share your experience on BBB.org/ScamTracker can help others avoid being victimized.