GRAND RAPIDS, Mich. — Wednesday, President Joe Biden announced plans to cancel up to $10,000 and $20,000 in federal student loan debt for certain borrowers.
Katie Grevious said when they heard the news at the Better Business Bureau of Western Michigan they knew the scammers were getting ready to work.
“Who doesn’t want student loan debt erased,” said Grevious, communications specialist with the BBB. “But, you know, the BBB we know that that can welcome scammers to try to quickly jump on to a bandwagon and take advantage of some people who also are excited and want to get a refund right away.”
The national student loan debt currently stands at $1.6 trillion.
Specifically, Biden said debtors who make less than $125,000 and did not receive the Pell grant will have up to $10,000 forgiven. For those who did receive the grant, they could have up to $20,000 forgiven.
However, Grevious noted that it wasn’t stated how the debt will be canceled, either through the debtor or the loan provider.
“With this particular announcement, especially you know we want people to just take a breath. It’s exciting when you find out that you could qualify to have thousands and thousands of dollars of debt erased. But, there is no information out yet on how this is going to work,” Grevious said during a Zoom interview with FOX 17 on Thursday. “So, we want people to just relax. If you get phone calls, emails of people telling you this is how it’s going to work, this is how you get that money back, just take a pause.”
Grevious said that information isn’t available yet and scammers know that. So, taking a minute or two to pause and think about what’s being said will be helpful.
“We want people to be cautious and not fall for maybe someone calling, maybe someone emailing you know trying to say ‘Hey, we can get you on a short list’ or ‘Hey, here’s the new information that came out. I know you weren’t paying attention. You saw it on Twitter. Here’s the information, click this link, give me your information over the phone,’ stuff like that,” she said.
Jacob Channel, senior economist with Student Loan Hero, suggested logging onto to StudentAid.gov and finding out the status of your loans.
“The biggest one is to just know where you stand,” Channel said during a Zoom interview with Fox 17 on Thursday. “So, for example you want to know for sure who your student loan provider is. StudentAid.gov has a list of official student loan providers. If you’ve got a private student loan provider you want to check with them, check their website. Be sure they’re legit.”
He said during phone calls, you can ask for their information and cross-reference them online. Check their website if they have one.
Another thing to look for, he said, is grammar.
“In terms of keys words I would always keep an eye out for a misspellings, you know, if somebody’s misspelled your name [or] if someone body’s misspelled a common word,” Channel said. “If grammar seems a little bit wonky that could be red flag.”
Grevious said that scammers talk to one another, and if they’re not successful the first or second time, they’ll call or email again.
However, should you get scammed and you've given out your financial information, call your bank as soon as possible so they can freeze your account.
“If you think that you gave out your Social Security number, which you do need [in order] to take out a loan, you want to contact the Social Security Administration right away so that they can protect your identity because that’s going to come in handy down the line with taxes and things like that," Grevious said. "Once you lose that identity, you don’t get it back. You’re identity’s gone.”
Worst case scenario, you can always call law enforcement, Channel said, and your state’s attorneys general office to get them involved.
However, both experts said it's best to be alert and look out for the red flags.
“You don’t want to tell people you know ‘You just have to always be suspicious.’ But, you do,” Grevious said. “It’s just the best way to protect yourself so that you don’t find yourself in situation you wish you weren’t in down the road because of one small slip up.”
