DIFS: Protect Yourself from Student Loan Debt Relief Program Scams?

Media Contact:?Laura Hall, (517) 290-3779, [email protected]
Consumer Hotline: 877-999-6442, Michigan.gov/DIFScomplaints

FOR IMMEDIATE RELEASE:?November 21, 2022

(LANSING, MICH) The Michigan Department of Insurance and Financial Services (DIFS) is alerting Michiganders to protect themselves from scams related to the Biden Administration?s new Student Loan Debt Relief Program. Although the courts have currently blocked the program, scammers have been attempting to take advantage of this uncertainty to steal money or personal information from Michigan?s student loan borrowers.

"An estimated 1.3 million Michiganders may be eligible for student loan relief under this new program, and this can mean a large number of potential targets for scams,? said DIFS Director Anita Fox. ?Criminals will often pretend to be from the federal government or a company that can help you take advantage of the Relief Program. Never give your Social Security Number or other personal information to anyone who sends you unsolicited emails, texts, or phone calls, and never agree to pay for an unsolicited service. Giving out your information to the wrong person could end up costing you thousands of dollars in the long run, so be sure to take steps to protect yourself and your family.?

Announced in August of this year, the Biden Administration?s Student Loan Relief Program would forgive up to $10,000 in federal student loan debt for those with incomes below $125,000 a year, or households earning less than $250,000. Those who received Pell Grants to go to college could have an additional $10,000 in debt eliminated. One in seven Michiganders have a current student loan, with an estimated outstanding total of more than $51 billion. Under the program?s eligibility requirements, an estimated 1.3 million Michiganders, and 43 million Americans nationwide, could qualify for some level of relief.

Programs with major financial impacts, such as the new Student Loan Debt Relief Program, often create opportunities for scammers. They seek to take advantage of any confusion or time constraints to obtain Social Security Numbers or other personal information so that they can steal the identities of their victims. Other scammers will claim to be able to help borrowers get relief for a fee and will take the money without providing the services they have offered.

DIFS encourages Michiganders to take the following steps to avoid falling into these scams:

• Never agree to pay for assistance in obtaining student loan relief.
• Never give away your Social Security Number or FSA ID. Scammers will often contact you to offer their assistance but will say they need your Federal Student Aid ID or Social Security Number to process your application. These people will then use these numbers to steal your identity.
• Do not rely on caller ID. Scammers can use technology to make it look like they are calling from a legitimate business or government agency.
• Don't trust mailers that appear to be government communications. These may be advertisements for private companies that may have a disclaimer buried in small print.
• Don?t be rushed into taking action or signing paperwork. Some scammers will attempt to rush you into taking action now to ensure you qualify and that you don?t miss a deadline. Be sure to take your time and check out all offers and statements that are made to you.

For more information about the federal student relief program, visit StudentAid.gov or contact your student loan servicer. For more information about the financial services industry in Michigan, visit Michigan.gov/DIFS or call 877-999-6442, Monday through Friday from 8 a.m. to 5 p.m.

The mission of the Michigan Department of Insurance and Financial Services is to ensure access to safe and secure insurance and financial services fundamental for the opportunity, security, and success of Michigan residents, while fostering economic growth and sustainability in both industries. In addition, the Department provides consumer protection, outreach, and financial literacy and education services to Michigan residents. For more information, visit Michigan.gov/DIFS?or follow the Department on Facebook, Twitter, or LinkedIn.

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