Interest on student loans will resume in September, with minimum payments due in October. The Better Business Bureau (BBB) warns of scammers are attempting to exploit the latest developments.
The average federal student loan debt per borrower is more over $37,000. And the average monthly payment is $503. President Biden’s plan would have provided relief to the majority of federal student loan borrowers, as many as one in every eight Americans, with nearly half having their student loans completely erased, but the Supreme Court of the United States ruled in a 6-3 decision that the Biden Administration lacked the authority to forgive hundreds of billions of dollars of educational debt.
The BBB’s Amie Mitchell warned that scammers will take advantage of the confusion.
“We expect to see an increase in the volume of scams and phone calls around this time, when people must begin paying back those student loans and when the interest starts accruing again,” Mitchell said.
Mitchell said they’ll start calling people in their twenties in the hopes of finding someone who will fall for it.
“It doesn’t matter if you went to school or not; the scammers simply target that age bracket,” Mitchell explained.
She warns against companies that promise to wipe out your debt for a price.
“Although there are some legitimate debt consolidation companies, there aren’t many, and when it pertains to student loans, you’re going to owe these,” Mitchell said.
“Do not fall for someone saying, ‘Hey, pay me a small deposit and we’ll just take care of this for you,’ because it doesn’t work that way,” Mitchell cautioned.
According to the BBB, there may be some uncertainty because consumers haven’t been in the practice of making these payments.
Your loan servicing firm may be different, and you may have forgot your password or not checked your account balance in years.
Since the student loan payment freeze went into place in March 2020, millions of borrowers have not had to make a payment.
For federal student loan repayment alternatives, go to studentaid.gov, and if you’ve been a victim of a fraud, report it to BBB fraud Tracker.