As part of its annual Get Smart About Credit campaign, the American Bankers Association Foundation today released a new infographic providing consumers with information on the prevalence of student loan debt forgiveness scams and red flags they can look out for to avoid falling victim.
The infographic is the second in a suite of four infographics the Foundation will release in the coming weeks highlighting scams targeting college-aged students. Banks of all sizes participating in the Get Smart About Credit campaign are encouraged to share the infographics with their customers and distribute the information in the communities they serve.
According to the new infographic, 43 million Americans have outstanding federal student loans, totaling more than $1.6 trillion. Unfortunately, scammers target these individuals with deceptive marketing tactics that promise student loan debt forgiveness. In 2017, a partnership between the FTC and state law enforcement offices uncovered more than $95 million lost to student loan debt forgiveness schemes.
“We know many consumers across the country are in the process of exploring the student loan debt forgiveness opportunities following the Biden administration announcement in late August,” said Lindsay Torrico, executive director, ABA Foundation. “As they do so, it’s important they know about these scams and remain on high alert for suspicious behaviors that may indicate a criminal scheme.”
The ABA Foundation infographic encourages consumers to be wary if asked to do any of following three things:
- Pay upfront costs or monthly fees. Scammers want to trick you into paying upfront fees to get the process started. This is illegal.
- Provide your Federal Aid Student ID. By providing your ID, scammers can access your account and steal your identity.
- Act immediately to qualify. They want to pressure you to sign up for debt relief without asking questions.
If you or your family encounter suspected student loan forgiveness scams, report them immediately to the following government agencies:
- Federal Trade Commission: https://reportfraud.ftc.gov
- Better Business Bureau: https://www.bbb.org/scamtracker
- Federal Student Aid Information Center: https://studentaid.gov/feedback-center
Get Smart About Credit is one of three ABA Foundation youth financial education campaigns held each year. The national program allows bank employees to share real world financial knowledge with students on obstacles facing young adults including saving for the unexpected, managing money, paying for college, knowing their credit score, protecting their identity and exploring careers in banking. The ABA Foundation provides campaign resources including the lesson plans, in English and Spanish, program materials and real-time customer support entirely free to member and non-member banks to encourage industry participation. This infographic and the three debuting later this fall will be new additions to this year’s programming. Since 1997, the ABA Foundation’s financial education initiatives have reached 11.6 million young people through more than 375,000 banker lessons.
To view the full infographic, visit the ABA website.
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