Student loan debt scams: Wisconsin agencies issue warning

The definitive extension of the federal student loan payment break runs until January 31, 2022.

The Wisconsin Department of Agriculture, Commerce, and Consumer Protection (DATCP) and the Wisconsin Department of Financial Institutions (DFI) urge student loan borrowers to exercise caution when it comes to questionable companies and possible fraudsters.

“Student loan debt relief scammers target borrowers with bogus offers of loan cancellation or savings from consolidation,” DATCP Secretary Randy Romanski said in a press release . “Consumers can access many resources without paying a fee. I encourage borrowers to use DFI’s resources to obtain information on repayment services and report any fraud to our DATCP team. “

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“With the resumption of student loan repayments in February 2022, it is more important than ever for borrowers to explore their student loan repayment options and develop a repayment plan today,” the secretary said. DFI, Kathy Blumenfeld, in release. “Borrowers should now take the time, while payments are still paused, to review repayment options such as income-based repayment plans, which reduce monthly payments, and verify their eligibility for the loan. cancellation of the student loan. It is important not to wait until the last minute to make a plan. and will help ensure a smooth return to reimbursement. “

Student loan borrowers should beware of phone calls, emails, letters, and texts calling for federal student loan relief or warning that student loan cancellation programs expire immediately. These aggressive solicitations are used to defraud borrowers with fees for services that are often free, and can be used by fraudsters to steal their money and identity.

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Signs of Fraudulent Student Loan Debt Relief Companies

  • The initial costs: These types of fees are prohibited for loan service providers. Do not provide credit card numbers or bank account information.
  • Promises of immediate total loan forgiveness: Most government forgiveness programs require many years of qualifying payments and / or employment in certain areas before loans can be forgiven.
  • FSA ID username and password requests from a borrower: 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.
  • High Pressure Selling Phrases: Fraudulent student loan debt relief companies often attempt to instill a sense of urgency by citing “new laws” or “program disruptions” as a way to encourage borrowers to contact them immediately.
  • Third Party Authorization Form or Power of Attorney Requests: Debt relief scammers often want these permissions to change the borrower’s contact information so they won’t be notified when the loan officer stops paying the student loan bill.
  • Spelling or grammar mistakes: Communications containing misspelled words or grammatical errors often indicate that the communication is likely from a scammer and should be deleted.

Student loan borrowers can find free repayment resources at DFI website, including the Wisconsin Strong Student Loan Repayment Tool provided by student loan experts at Savi.

Student loan borrowers who have questions are encouraged to call the Wisconsin Student Loan Hotline at 1-833-589-0750 or contact Federal student aid.

If you have been the victim of a scam, report it by file a complaint online, E-mail [email protected], or by calling the DATCP Consumer Protection Hotline at 1-800-422-7128.

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