Be wary of student loan and debt forgiveness scam
Q: A friend told me there is now a legitimate program for student loan forgiveness, is this correct?
A: Great question that is getting lots of attention today. Navient has more than 10 million student loan clients and recently settled a student loan forgiveness lawsuit. The results of the settlement won’t affect what individual borrowers owe. However, scammers were quick to notice this news item and are now targeting borrowers with false claims of debt forgiveness — for a fee. Here’s what you need to know.
HOW THE SCAM WORKS
You receive a call from a person claiming to represent Navient. They explain that as a part of the lawsuit settlement, your student debt is partially or completely forgiven. Of course, you’ll need to confirm your personal information and pay a fee to “transfer” the debt from Navient to “the Department of Education” or another official-sounding organization. These claims are based on actual procedures you may in fact qualify for, but this unsolicited caller is not working in an official capacity or related to any of the organizations cited in the call.
The caller explains the fees necessary, usually on a monthly basis, then request either debit or credit card information. Then, they will begin making withdrawals according to the payment plan to which you agreed. Many consumers notice something is wrong when their Navient loan payment continues to be required, even after setting up payments with the new company.
Navient customers will not receive a phone call offering to transfer your loan. If you engage with these con artist callers, you could compromise your personal information and lose money as well. Instead, look for other options such as the Public Service Loan Forgiveness, studentaid.gov, and Department of Education, ed.gov, for deferral or other information in relation to your type of loan.
HOW TO AVOID THE SCAM
Understand how the Public Service Loan Forgiveness program works. You can request information from your servicer, such as Navient, about potential student loan forgiveness programs, but it’s important to know the basic requirements of the program — you must have Direct Loans and make 10 years of qualifying monthly payments under certain payment plans while employed by an eligible nonprofit or government organization. The government contracts with one specific servicer, FedLoans, myfedloan.org, to determine eligibility.
Don’t take unsolicited callers at their word. Remember that legitimate businesses and government offices do not call people without their permission. If you receive a call out of the blue, don’t be quick to give out your personal information, even if the caller offers you a great deal.
When in doubt, hang up. If you aren’t sure about a caller and their claims, ask for a call back number, hang up and do your research. A little digging will usually reveal if you were speaking with a legitimate company or not.
Visit official websites to learn about loan forgiveness. You can find out more about whether you qualify for loan forgiveness by visiting the Federal Student Aid website and Navient’s official website at navient.com.
MORE INFORMATION
BBB Tip: New college grads, watch out for these scams and BBB Tip: Student Loan Forgiveness, BBB.org. You can also find general information about common scam tactics by visiting BBB.org/avoidscams.
If you’ve been a victim of a student loan forgiveness scam, please report it at BBB.org/scamtracker. By boosting scam awareness, you can help put a stop to common scams.
Jim Winsett is president of the Better Business Bureau in Chattanooga.