Wisconsin officials warn of student loan payment scams
The DATCP noted the final extension for the federal student loan payment pause runs through Jan. 31, 2022.
MADISON, Wis. (WMTV) - Student loan borrowers should consider being cautious amid a number of scams that could come up when the federal student loan payment pause ends, the state Department of Agriculture, Trade and Consumer Protection warns.
The DATCP noted Monday that the final extension for the federal student loan payment pause runs through Jan. 31, 2022. DATCP Secretary Randy Romanski says fraudulent loan companies may take advantage of this.
“Student loan debt relief scammers target borrowers with false offers of loan forgiveness or savings from consolidation,” Romanski said. “There are many resources consumers can access without paying a fee. I encourage borrowers to utilize the resources at DFI for information about repayment services and report any fraud to our team at DATCP.”
The DATCP encouraged borrowers to create a repayment plan now, before their payments become due. Wisconsin Department of Financial Institutions Secretary Kathy Blumenfeld suggested people look into different types of repayment plans, as well as loan forgiveness.
“Not waiting until the last minute to make a plan is important and will help ensure a smooth return to repayment,” Blumenfield said.
The two agencies provided these tell-tale signs for recognizing a fraudulent student loan company:
- Requests for up-front fees
- Promises of immediate total loan forgiveness
- Requests for a borrower’s FSA ID username and password
- High-pressure sales phrases to get people to call back immediately, such as “new laws” or “discontinuing program”
- Requests for a third-party authorization form or power of attorney
- Use of spelling or grammatical errors
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