Student loan scams have stolen an estimated $5 billion from Americans this year

Americans lost billions to student loan scammers this year as the Biden administration works to offer student loan forgiveness to tens of millions of borrowers. took advantage of the fuss and confusion surrounding the exemption from exemption, and persuaded many to give up their money and personal information.

“Scammers are watching the news,” said Giulia Porter, vice president of call and text blocking app RoboKiller. “They follow trends and design more believable scams,” she said.

Scammers stole $5 billion from Americans this year in student loan-related fraud, according to RoboKiller estimates. The company uses Federal Trade Commission data on reported economic losses and its own data on fraud types and call volumes to develop its estimates. In 2021, the FTC will 2.8 million fraud reports—A quarter of them also reported financial losses, totaling $5.9 billion in annual reported losses. This total does not include financial losses due to identity theft.

So far this year, RoboKiller counts about 700 million student loan robocalls each month. The volume of fraudulent texts surged in August after the Biden administration announced plans to forgive federal student loan debt of up to $20,000 per borrower, according to Porter. We were counting 2-3 million student loan scam texts per. In August, his monthly total increased to 9 million. “One of the government’s new ways to reach people is text his messages,” he says. “That’s why the increase is so big.” Federal Student Aid sends text alerts to borrowers who have signed up to receive them.

According to RoboKiller data, student loan scams make up about 10% of all robocalls. This is a top 5 topic for scammers, right behind the infamous extended car warranty scam which accounts for about 15% to 20% of all robocalls.

Student loan scammers typically use one of two strategies. Too good an offer or a spoof. Scams that are too good to be true often entice potential victims to act quickly and demand a good refinancing rate or pay a fee to demand a full forgiveness of the loan. These offers push the boundaries of consumer protection laws and may come from legitimate companies sending robocalls and texts.

“There are different levels of shadyness in what they offer. When you robocall people and offer great rates for student loan financing, there’s no fine print you can send people over the phone.” Mr Porter said, “There is certainly a gray area there. It may be a legitimate agency, but the offer itself may not be as good as it sounds.”

Porter said identity fraud has become more popular since the announcement of the Biden administration. Scam callers impersonate the Department of Education or the Department of Education Loan Her Servicer to entice people to turn over personally identifiable information or pay a fee to access the Federal Loan Forgiveness Program. (You can get advice on the right way to apply for student loan forgiveness here.)

RoboKiller cannot track the origin of the scam or what phone number the scammer is trying to call. Most scammers use caller ID spoofing to hide their real phone number.

“Somehow, data on who has student loans could end up in the wrong hands,” Porter said. “Student loan numbers are big enough that scammers may be sending out a ton of robocalls trying to take over people with student loans.”

The Department of Education warns borrowers about scammers in an official message about student debt forgiveness. In their automated debt relief application confirmation emails, the department tells borrowers to beware of fraud and lists three official email addresses where borrowers may receive legitimate emails.The same message is studentaid. gov on his website.

“Companies may contact you to help you obtain loan forgiveness, forgiveness, cancellation, or debt forgiveness for a fee. I’m here. “Be sure to work only with the U.S. Department of Education and your loan service provider and never give out your personal information or account passwords to anyone.”

Posting on r/Scams, a Reddit user detailed a scam a partner fell into two months ago. In this scam, he demanded $200 payments four times in exchange for a partial loan forgiveness, and a $10 monthly repayment rate on the remaining loan. Another user described being scammed in September after receiving a letter in the mail detailing the exact loan balance. The user called the number provided in the letter and, after a two-hour call, provided their social security number, bank account, and routing number.

“I’m embarrassed because I couldn’t trust my ‘oh this sounds too good to be true’ intuition,” the user wrote.

Porter warns that even the most tech-savvy people can be fooled by increasingly sophisticated fraudulent phone calls and texts. She advised that if she lost money or personal information through fraud, she should report it to the FTC and work with her bank to recover the loss.

“I know a lot of very smart people who just answer the phone and they may have done something with their student loans recently. But you can actually get caught,” says Porter. “For some people, especially those trying to get out of debt, it’s very devastating.”

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