With federal loan payments restarting on Oct. 1, New Yorkers are refreshing their memories (and worrying about) of how much they owe in student loans — and scammers are taking advantage. Scams are on the rise and stress levels are high when it comes to student loan repayment as many New Yorkers’ loan payments will return next month.
And Carolina Rodriguez, director of the Education Debt Consumer Assistance Program, which helps New Yorkers with their student loan debt, says people are falling prey to these types of scams now because everyone is paying attention to their student loans, and some may know they can’t afford the previous payments.
“(The scammers) are going after people that are very vulnerable,” Rodriguez said. “And they don’t have money to begin with, so for them to have to pay the little that they have to (scammers), and then (the scammers) potentially leave them worse off, at least temporarily, that sucks.”
Student loans were put on hold in 2020 at the start of the COVID-19 pandemic, and the postponement was extended multiple times by the Biden administration.
Throughout the pause, the Biden administration pushed to forgive $400 billion in student loans, but the attempt was knocked down by the Supreme Court in June.
However, eligible borrowers could see their monthly payments decrease substantially by enrolling in the Saving on A Valuable Education, or SAVE, loan repayment plan, which began rolling out in August. It calculates a borrower’s monthly payment based on income and family size.
How to avoid being scammed over your student loans
Here’s what you should look for to avoid being scammed when it comes to repaying your student loans, according to the Federal Trade Commission and the New York Department of State’s Division of Consumer Protection.
- You don’t need to pay to sign up for any programs to lower your loan payments or get forgiveness. Visit studentaid.gov/repay for free help.
- Don’t give away your Federal Student Aid ID login information. Anyone who says they need it to help you is a scammer.
- Don’t trust anyone who contacts you promising debt relief or loan forgiveness. Slow down, hang up and log into your student loan account to review your options.
- Don’t trust any person or program that promises you special access or guaranteed eligibility. You’ll never need to pay for advice or help with your federal student loans, deferment or income-based plans.
- Be wary of scammers that make false claims or say you have an incomplete application. If you have any questions about your application status, go directly to your U.S. Government federal student loan portal to access your account and confirm any details.
- Protect yourself from phishing scams. If you didn’t initiate the communication, don’t share your personal information.
Robocalls are out, robotexts are in:What to know about the growing phone scam
Genuine emails to borrowers will only come from noreply@studentaid.gov, noreply@debtrelief.studentaid.gov or ed.gov@public.govdelivery.com, the Division of Consumer Protection says.
And if you encounter a scam, file a complaint on the official Federal Student Aid website or report it to the FTC at reportfraud.ftc.gov.
Debt problems:New Yorkers can get new federal loan program help. See if you are eligible.
Will failure to pay right away damage my credit?
There is a 12-month ramp-up period for loans eligible for the payment pause through Sept. 30, 2024, Rodriguez said, which protects borrowers from having a delinquency reported to credit bureaus.
“People should not be falling prey to these scams thinking, ‘oh my God, I have to pay by next month or otherwise I’m going to ruin my credit’,” Rodriguez said. “That’s not going to be the case.”
Emily Barnes is the New York State Team consumer advocate reporter for the USA TODAY Network. Contact Barnes at ebarnes@gannett.com or on Twitter @byemilybarnes.
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