LINCOLN, Neb. – Student-loan forgiveness has become an increasingly popular scam targeting young adults, and as an October deadline looms, consumer advocates are warning people to watch their wallets.
Tami Barrett, Lincoln and greater Nebraska branch manager with the Better Business Bureau, said she expects to see an uptick in fraudulent activity this fall as the current COVID-19 pause in federal student-loan payments draws to a close on October 1.
“A lot of people think it’s just older people,” said Barrett. “But actually the (Federal Trade Commission) and the Better Business Bureau reveal that 44% of people who actually get scammed are between the ages of 20 and 29 years old.”
By comparison, just 20% of people between 70 and 79 have lost money to fraud.
People with student loan debt present a giant target for scammers. According to the U.S. Department of Education, 43 million student-loan borrowers in the U.S. owe a total of $1.6 trillion in student loans.
The average U.S. household with student loans owes more than $57,000, with women and people of color holding the most debt.
Barrett said scammers are likely to offer loan holders free extended forbearance and fake “President Biden loan-forgiveness plans.” She said the object of the scams is to steal young adults’ money or their identities.
Still, Barrett said there are ways to avoid falling prey to scammers.
“Never agree to upfront fees,” said Barrett. “It is in fact illegal to charge an upfront fee for the service of lowering federal student-loan payments or reducing student-loan debt.”
President Joe Biden campaigned on canceling student debt, and earlier this month the U.S. Department of Education canceled nearly $56 million in student-loan debt, mostly connected to institutions engaging in misconduct, such as promising jobs or falsely claiming credits would transfer to universities.
If you think you’ve been targeted, the Better Business Bureau offers an interactive scammer tracking tool at ‘BBB.org/ScamTracker.’
