HARRISBURG — Phoned or emailed offers of student debt relief services can seem too good to be true — and state officials are warning that often times they are.
The state Department of Banking Securities and Department of Education issued a warning Thursday that there has been a recent surge in student-loan forgiveness scams.
Officials from the departments say that the financial strife caused by the COVID-19 pandemic has created an environment ripe for scammers to take advantage of those struggling to pay off debt.
”With the continuing pandemic, many consumers have been in search of financial relief,” Secretary of Banking and Securities Richard Vague said. “Like other scams, these perpetrators prey upon the hope and vulnerability of people, creating an ideal scenario to take advantage of them.”
Scammers are using the attention that student debt has recently received — public calls for debt forgiveness, a pandemic-related pause in loan payments — and the confusion over the changing landscape of student debt to trick people.
Officials said anyone who is contacted about student loan forgiveness should confirm that it’s legitimate before providing any personal information. Some tips on telling scams from the real thing include:
• Be skeptical. Scammers often obtain student loan information illegally. Just because someone has information about your loans, doesn’t mean they are to be trusted.
• Research the company. Check the validity of the company contacting you since many “companies” run by scammers do not actually exist.
• Due diligence. Check what program is being offered to you. Some scams offer to enroll you in programs like the “CARES Act loan forgiveness” or the “Biden forgiveness program,” neither of which exist.
• Verify email addresses. Ensure that emails being sent to you about your student loans are from a .gov email address.
• What legitimate programs will and won’t ask you for. Proceed with caution before sharing any of your sensitive or financial information like a Social Security Number or credit and bank information. If in doubt, hang up and call your servicer directly.
• Pause before taking action. Confirm any correspondence or calls with your servicer before taking any action.
Officials say that anyone who feels they have been a victim of a student loan forgiveness scam should close accounts or stop payment, alert your servicer, monitor your credit report and report the scam at reportfraud.ftc.gov/#/ or Pennsylvania Attorney General at attorneygeneral.gov/submit-a-complaint.
For more information or to file a complaint about financial transactions, companies or products call the Department of Banking Securities at (800) 722-2657.
MEANWHILE, the state’s student aid agency is asking for a 12.8% increase in funding for the state college grant program in the 2022-23 state budget to maintain the maximum award at its historic high of $5,000.
PennLive reported the Pennsylvania Higher Education Assistance Agency board of directors on Thursday approved requesting Gov. Tom Wolf to earmark in his budget proposal more than $350 million for the grant program.
That is about $40 million more than the $310 million included in this year’s state budget.
“I think it’s important that we try to maintain that maximum award of $5,000, a goal that we were able to reach last year,” said Rep. Mike Peifer, R-Pike County, who chairs the board. “The history of our board has always tried to indicate that we don’t want to go backwards. We’re trying to stay level or go forward.”
The need for additional funding stems from the agency’s anticipation of having less money leftover after this year’s grants distribution to apply toward next year’s awards.
This year, the carryover was greater from 2020-21 due to having fewer students applying for the aid as a result of a downturn in college enrollments. That, along with PHEAA supplementing the state appropriation with $15 million from its student loan business earnings, enabled the agency to boost the maximum award to $5,000, up from $4,679 the prior year.