Federal student loan payments resume next May — here are tips to avoid scams

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DES MOINES, Iowa — Although President Joe Biden extended student loan repayment in late December, scammers are targeting unsuspecting borrowers.

Mary Jo Terry, the managing partner for Yrefy, a company specializing in private loan refinance programs, offered some tips on preparing for paying back your loans without being scammed. Here are three tips. 

  1. Make sure you know who your loan servicer is. According to the Consumer Financial Protection Bureau, your loan servicers keep track of your loan payments, manage your escrow account, and keep tabs on principal and interest paid. If you are unsure who your service loan provider is, you should visit www.studentaid.gov
  2. Beware of some loan consolidation. Any loan consolidation company that attempts to collect payments is not legitimate. If you want to consolidate your loans, you could do it through a federal program.
  3. Do not give away personal information. Your loan servicer should not request any personal information. For example, if a loan servicer asks for your social security number, address, etc., that is a red flag. Terry says your loan servicer should have all of your information.

However, if you are a victim of a student loan scam, Terry advises you to take action now. 

“First place I would go to studentaid.gov, and I would file a complaint. Then I would also go to your loan servicer and file a complaint,” said Terry. “Then, the last but not least, if you’re completely concerned, you can go to TransUnion Experian, Equifax, and put a fraud alert on your account. The point of the fraud alert is to really ensure that nobody can open credit without someone actually notifying you.”

Terry also says that borrowers should start planning how to repay their student loans and start contacting their loan servicer.

The student loan extension ends May 1, 2022. 

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