Tech

Federal Trade Commission Warns Of Student Loan Relief Scams

Cybersecurity experts told Newsy the relief program is particularly lucrative to scammers because it offers a huge target for information and money.

Federal Trade Commission Warns Of Student Loan Relief Scams
Jenny Kane / AP
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The federal student debt relief application just launched, and scammers are already preparing to use it to get a hold of money and personal information, according to the Federal Trade Commission. 

"The scammers, they have the internet, too, right? They watch the news," TrustedSec Director of Advisory Solutions Alex Hamerstone said. "They'll use that story as a way to get you to click on things. You're much more likely to click on something that's current and relevant than you are something more random."

Cybersecurity experts told Newsy the relief program is particularly lucrative to scammers because it offers a huge target for information and money. The White House said it expects the program to "benefit as many as 40 million Americans.”   

There isn't a paper application for the program, so correspondence between relief seekers and the government will happen online. This gives fraudsters the opportunity to do things like phish people with fake email addresses that may look like official government accounts. 

Student Debt Relief Website Launches, But Borrowers Are Skeptical

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"They created this program where it's first come, first serve. So there's an urgency. You get money—significant money, right? Up to $10,000. And it has to be done within a certain time period," Secure Anchor Security Consulting CEO Eric Cole said. "So all those factors are the exact recipe that scammers look for in targeting individuals … 'Click here and we'll help you get first online.' 'Click here and we'll make sure you're set up for the student loan.'"

The FTC is warning consumers of red flags to watch out for, including solicitations that say you have to pay to apply, and anyone asking for your FSA ID, bank account or credit card information. The agency also stressed that there is only one website where individuals can apply, and that no documents need to be uploaded or attached during the process. 

Cole added that those not seeking loan forgiveness should be aware that their data might be implicated in one of these scams, as well. 

The thing people don't realize is, the database with student loans has a lot of people that don't qualify for this program. So you might have a student loan, but you're making too much money. But if they open up that database so the people that do qualify could be checked or invalidated, your data is put at risk.