As repayments resume, beware of scams targeting student loan borrowers

0

FORT WAYNE, Indiana (WANE) – In three months, 43 million federal student loan borrowers are expected to resume their student loan payments.

For many Americans, student loans are their introduction to debt. When the COVID-19 pandemic rocked the economy, these federal loans were put on hold without penalty under the CARES Act. The extension was initially only supposed to last six months, but former President Donald Trump and President Joe Biden have extended it several times.

“As we all know, the pandemic has kind of squeezed family budgets, so not having to shell out those hundreds of dollars to the federal government has been really good for borrowers,” said Andrew Pentis, senior writer at Student. Loan Hero Inc., and a Certified Student Loan Advisor. “It has also been very helpful for borrowers who are already behind on their student loans. This is because this break also gave them the opportunity to avoid delinquency and default and all these consequences such as wage garnishment. ”

The latest extension is expected to end in early 2022, with payments resuming in February. Pentis told Briana Brownlee of WANE 15 that the process of resuming payments would be complicated. The federal government would have to mix things up and other lending services could recoup a borrower’s loan.

With the end of the last extension, new student loan cancellation scams are on the rise. The Better Business Bureau of Northeast Indiana said it has seen an increase in complaints about student loan cancellations.

According to the BBB, there are currently two types of scams.

  1. Scammers Offer To Reduce A Borrower’s Payments Through Debt Consolidation
  2. Scammers promise to reduce borrower’s debt by canceling student loan

However, both of these come at a cost, and not just a monetary amount, but your personal information such as your Social Security number.

“Always be sure to research the lender,” said Nichole Thomas, director of the Better Business Bureau in Northeast Indiana. “Anytime you get an out of the blue phone call, email, or text message telling you they can save you money, we recommend that you research that company. “

The easiest way to find out if a business is legitimate: Google the business name with “scam” in the search bar, suggests the BBB.

Borrowers need to make sure they’re not headed with a sense of urgency, Thomas said.

“Crooks are really good at trying to get you out of your game, by giving them a scenario that can panic you,” Thomas said. “We want you to remember that every time someone tries to panic you or put you in an emergency situation. Slow down, slow down and ask questions.

Pentis said this was likely happening because of the student loan moratorium. He said that whenever there are major changes in the student loan industry, it opens the door for scams.

“The first one red flag you should be aware of this, if someone contacts you by phone. This in itself is a red flag, because generally your federal loan officer will not contact you by phone, even your private lender will not either, ”Pentis said. “Usually, the way you process your loan and your payment is that you contact your loan manager. ”

Pentis pointed out that while the deal sounds too good to be true, it usually is.

What you need to know before resuming payments:

Before resuming repayments, borrowers should ensure that their contact details are up to date for the loan manager.

“This is because they can contact you to let you know when payments will resume or when your next payment is due or maybe your loan transitioned to a new loan service,” said Pentis.

Another tip: If your job or situation has changed, there is an income-based program that can cap monthly payments.

“If you don’t feel ready to resume your payments, talk to your loan officer, explore your options,” Pentis said. “There are postponements and abstentions, again, income-driven payment plans.”

Pentis said it was better to have a plan now rather than wait until January to define a strategy.


Source link

Share.

Leave A Reply