Student Loan Debt Fraud: Wisconsin Authorities Warn
The final extension of the Break in payment of the federal student loan runs until January 31, 2022.
The Wisconsin Department of Agriculture, Trade and Consumer Protection (DATCP) and the Wisconsin Department of Financial Institutions (DFI) encourage student loan borrowers to be careful when it comes to questionable companies and potential fraudsters.
“Debt waiver fraudsters target borrowers with false offers for loan waivers or savings from consolidation,” said DATCP secretary Randy Romanski in a press release. “There are many resources that consumers can access without paying a fee. I encourage borrowers to use the resources at DFI for information on repayment services and to report any fraud to our team at DATCP.”
REGISTER TODAY: Receive daily headlines and emails with breaking news from FOX6 News
“With student loan payments resuming in February 2022, it is more important than ever for borrowers to review their student loan repayment options and develop a repayment plan today,” DFI Secretary Kathy Blumenfeld said in the press release. “Now, while payments are pending, borrowers should take the time to review repayment options such as income-based repayment plans that lower monthly payments and their eligibility for student loan waivers. It is important not to wait until the last minute to create a plan “and will help ensure a smooth repayment.”
Student loan borrowers should be wary of phone calls, emails, letters, and texts demanding a federal student loan exemption or warning that student loan relief programs are expiring immediately. These aggressive prompts are used to scam borrowers with fees for frequently free services and can be used by scammers to steal their money and identity.
FREE DOWNLOAD: Get breaking news in the FOX6 News app for iOS or Android.
Signs of fraudulent student loan debt relief companies
- Fees in advance: These types of fees are prohibited for loan service providers. Do not provide credit card numbers or bank account information.
- Promise of Immediate Full Lending: Most government lending programs require many years of qualifying payments and / or employment in certain areas before loans can be waived.
- Requests for a borrower’s FSA ID username and password: A borrower’s FSA ID has the same legal status as a signature, it can be used to make changes to the borrower’s account without their knowledge. Do not share a borrower’s FSA ID with anyone.
- Sales arguments under high pressure: Fraudulent student loan debt relief companies often attempt to instill a sense of urgency by quoting “new laws” or “discontinuing programs” to encourage borrowers to contact them immediately.
- Application for a third-party power of attorney form or a power of attorney: Debt relief scammers often want these authorizations to change the borrower’s contact information so they aren’t notified when the loan service provider stops paying the student loan bill.
- Spelling or grammatical errors: Messages with misspelled words or grammatical errors often indicate that the message was likely from a scammer and should be deleted.