Scammers preying on college students with loans, using tricks to force them deeper into debt

PITTSBURGH — Student financial aid applications are now open and an estimated 43 million people are just under three months away from their student loan payments resuming. Channel 11 has a warning if you fall in either of those groups. Scams involving student grants and loan forgiveness are skyrocketing, leading people further into debt when there are free programs out there.

“I know that there are certain criteria that you need to meet in order to have loan forgiveness but I’m not super knowledgeable about that whole process,” said Pitt student, Josh.

The pandemic led the government to make some changes which are causing confusion among borrowers. Students and recent graduates like Marci Cross-Ramirez are getting calls and voicemails like this: “Hey it’s Chelsy with students help assistance. I’m actually just doing a follow up call for you regarding your federal student loans. I do see here we actually still have you pre-qualified for the student loan forgiveness program.”

Penn State graduate student Marci Cross-Ramirez got the voicemail and thought it was the real deal. “I just graduated from undergrad like a year and a half ago. So, I wasn’t sure if, if that was if that was the case. Then top of that, because there’s been so much about loan forgiveness in the news, and kind of trying to figure out who’s going to get loan forgiveness and who’s gonna qualify, I thought maybe it was legitimate.”

The Better Business Bureau says students are being taken advantage of in two different ways. One is misleading and the other is a scam.

“There are FAFSA websites that are set up that charge a fee for using a free government service,” said BBB Western Pennsylvania Public Relations Director, Caitlin Driscoll. “So again, it’s not something that’s illegal, but something that’s more so what we would refer to as misleading since people can do that on their own at no cost.”

That same thing goes for people consolidating federal student loans or applying for income-driven repayments.

With all the talk about student loan forgiveness, it’s hard to keep track of who qualifies for what. There are programs that will forgive your debt if you work for a qualifying public service or non-profit employer. But Driscoll says scammers will send legitimate looking letters promising to cut through the red tape of debt forgiveness, but don’t deliver, “they start paying fees to that company thinking that it’s going towards processing fees or toward just something slight that they have to pay for that loan forgiveness when that’s not the case.”

It’s leaving borrowers like Pitt student Hannah with the biggest fear: more debt. “You don’t want to think you’re paying it off down the road like you may want to save for something and know you still have more loans to pay off.”

While Cross-Ramirez didn’t lose any money or fall victim to student loan forgiveness scam, she reminds her friends and others to do your own research.

“I felt like offended because it’s like, I’m already a student in like $30,000 debt from undergrad and now going into just a little bit more debt with grad school,” said Cross-Ramirez. “It’s just the worst type of people to prey upon.”

The best way to see what you qualify for is to go to the student aid government website. You can check HERE or HERE.

The BBB reminds people to report the scam calls they get to their scam tracker website so they can track the different variations people are seeing and warn others.

The BBB says COVID-19 related grant scams are also targeting consumers and businesses. Driscoll says they continue to be reported locally, and people should be on alert.

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