Avoid Getting Scammed! A Student's Guide to Staying Safe

If you have significant student loan debt, it can be tempting to look for quick fixes. Unfortunately, this mindset can make you vulnerable to greedy scammers targeting students and recent graduates.

Protect yourself by being wary of offers that sound too good to be true, recognizing red flags, and doing your research. This guide offers helpful tips so you can outsmart scammers.

Why Are Students Targeted?

Scammers often target students by offering student loan forgiveness and debt relief. They prey on young adults who are stressed about carrying large amounts of debt. By offering quick fixes and promises to take all that worry away, they convince their targets to give away their money or personal information.

You may receive calls, emails, or social media advertisements offering loan forgiveness, reduced payments, or debt elimination. Illegal offers from scammers typically seek to gain money or personal information. They employ tactics that entice you to pay upfront fees for services they never deliver or steal funds by gaining access to credit cards or bank accounts.

With personal information such as your social security number, Federal Student Aid (FSA) ID, or other personal information, scammers can commit identity theft and open accounts in your name.

What Are the Consequences of Being a Victim of a Scam?

Falling victim to a student loan scam can have serious, long-lasting consequences. In most cases, the immediate result is financial loss if you inadvertently pay a scammer or if they steal from your accounts. Fraud also damages your credit score if scammers open new accounts and miss payments. Lower credit scores can make approval for loans, apartment leases, and even jobs more challenging. Legal issues may also arise if crimes are committed under your stolen identity.

Dealing with the aftermath of a scam is often stressful and emotional. You may feel violated, embarrassed, and overwhelmed. Rather than reducing your debt and stress, you are now burdened with new financial issues and the time-consuming process of remedying the situation.

Tips on How to Protect Yourself

1. Be Protective of Your Personal and Financial Data

Your social security number and FSA ID provide scammers access to your financial and student loan information. Only share them with trusted and verified sources. Avoid texting, emailing, or speaking these numbers, especially when using unsecured channels.

2. Be Wary of Unsolicited Offers

Never trust anyone who contacts you offering loan forgiveness or debt relief services, particularly if they require an upfront fee. The Federal Trade Commission (FTC) "prohibits companies that sell these services over the telephone from charging a fee before they actually settle or reduce a consumer's debt. It also prohibits debt relief providers from making misrepresentations and requires that they disclose key information that consumers need in evaluating these services."

Be aware that the only way to receive federal loan forgiveness is through qualifying programs like the Public Service Loan Forgiveness (PSLF) for government or non-profit employees, Income-Driven Repayment (IDR) Forgiveness, and other specialized loan forgiveness programs.

3. Recognize Red Flags

Scammers often disguise themselves as helpful advisors. They are also, unfortunately, becoming more sophisticated in their approaches. However, there are several red flags to look out for.

Be aware that scammers will try to pressure you into making quick decisions without considering the consequences. They will likely ask for personal and financial information and upfront fees. Scammers may promise quick and complete loan forgiveness when the reality is that the process takes time and has many specific qualifications. If it sounds too good to be true, it probably is.

4. Utilize Trusted Resources

Keep a list of your loan and bank accounts and know the name of your federal loan servicer. Contact them if you have questions or want to discuss ways to tackle your student loans and debts. They will never charge you a fee for these services. This Student Loan and Education Resource List provides a list of organizations that help with loan management, temporary relief, consolidation, resolving disputes, and other helpful loan-related services. You can also contact Dallas Baptist University's Financial Aid office or use this helpful resource if you need additional support.

By understanding why students are at risk, knowing how to spot red flags, and protecting your financial information, you can keep your current and future financial self safe.

What to Do if You Are Scammed

If you have been the victim of a scam, do not feel ashamed and seek help immediately.  Here are some steps to take:

• Report scams to the Federal Trade Commission (FTC) and a consumer protection agency.
• If it was related to student loan fraud, inform your loan servicer.
• Contact the Dallas Baptist University's Financial Aid office at (214) 333-5363 or finaid@dbu.edu for additional resources.
• Seek comfort and strength in God and your church community.