HARRISBURG — PHEAA is cautioning student loan borrowers to be wary of a new wave of student aid scams that could cost consumers thousands of dollars.
Many of these scams are attempting to take advantage of the confusion surrounding the repayment pause extension on federal student loans, now extended to Aug. 31. This is the sixth extension of the federal student loan repayment pause over the last two years.
“The extended repayment pause may give borrowers more time to prepare for resuming their monthly payments, but it also creates confusion and uncertainty – something that scammers are working overtime to exploit,” said Representative Mike Peifer, PHEAA Board Chairman. “The best defense is to stay knowledgeable about your options while working closely with your loan servicer who is always standing by with free assistance.”
Recent reports about potential broad-based federal loan forgiveness and other changes to student loan programs are also creating opportunities for scammers to target student loan borrowers.
“While PHEAA works hard to provide college-bound students and their families with the resources needed to avoid loan debt, borrowing money to pay for college is an unfortunate reality for many,” said Sen. Wayne Fontana, PHEAA Board Vice Chairman. “Successfully managing that debt is key to achieving lifelong financial stability, which means staying vigilant against scammers who will take advantage of anyone who lets their guard down.”
Student loan debt nationally exceeds $1.6 trillion. In Pennsylvania alone, more than 1.8 million borrowers are managing nearly $65 billion in student loan debt.
One of the recent scams attempts to convince borrowers that there are new student loan rules in place that require immediate action. Scammers typically promise unrealistic amounts of loan forgiveness, offer short cuts to loan forgiveness, or try to get a borrower’s Federal Student Aid (FSA) ID or other personal information and then rush them into paying immediately.
Many times, scammers will falsely use the U.S. Department of Education’s name and seal to give it legitimacy.
Scammers are also using multiple modes of communication to get in touch with borrowers, including texting, emailing, messaging on social media, and calling and leaving voicemails.
Students and families are also encouraged to visit PHEAA on Facebook, Twitter (@PHEAAaid), and LinkedIn where they can learn more about the higher education financial aid process, get reminders of financial aid deadlines, and obtain information pertaining to planning for higher education. Additionally, video tutorials explaining the student aid process and types of aid available can be found at YouTube.com/PHEAAstudentAid.
