Stay Woke, Not Broke: What you need to know about student debt scams

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We’re all familiar with the broke college student stereotype: eating ramen for breakfast, lunch, study munchies and dinner, mooching off the neighbor’s WiFi and settling for slow internet instead of setting up your own. However, it may come as a surprise that nearly 70% of public university students will suffer the post-graduation pitfall of student debt.

Another college cliché is that students are always on their smartphones. When they’re not studying or napping, they’re tweeting, snapping, texting, gramming or gabbing.

The idea that college students are perennially penniless and constantly on their phones makes them the perfect target for phone scams that threaten them by demanding money or lure them with too-good-to-be-true concepts like relieving or consolidating their debt

The phone calls often come from IRS or loan company impersonators requesting payment. Justin Lavelle, chief communications officer of PeopleLooker, a background check platform geared toward college students, says these swindlers bank on the impressionable nature of the average student.

“Basically, someone is calling pretending to be from the IRS saying that you owe money as a result of just being a student,” he says.

Lavelle says that these scams are so successful because a large portion of Americans actually are in some form of debt and are unaware if or what they owe.

“They’re just relying on people being ignorant to both the rules and regulations of how the IRS operates and also just their own personal situation,” Lavelle contends.

He says college students are especially susceptible because many of them are at least partially supported by their parents, causing them to be uninformed about their funds.

“There’s also all these different types of student loan programs, so there’s a lot of different paperwork,” Lavelle adds. “If a student or a college-aged person is unfamiliar with their financial situation, I think that’s what makes them more vulnerable.”

Lavelle says there are two ways to get smart on student scams: know how to detect a fraudulent phone call and get educated about your financial situation.

“Whether they’re scams or whether they’re some unscrupulous company trying to take advantage of someone who doesn’t know their situation, what they really tend to rely on is getting you to make that sort of split-second decision,” he explains. “The first thing to do is to never just agree to anything or make quick decisions on the phone, specifically if you’re encountering someone from the IRS or the government.”

Lavelle says the IRS always uses “snail mail” as the first means of communication. Increasingly they are sending emails, but they typically never call people on the phone.

“The idea of someone calling you on the phone to get you to either transfer your loans one way or actually invest money, that’s probably the single biggest red flag,” he says. “I would suggest just hanging up on them and jotting down the number and informing the police because the IRS never calls you directly and demands payments.”

Lavelle admits there is a small chance that the call could be from a legitimate student loan company, but it’s always wise to request an updated letter showing your account information in writing. It may seem like common sense to avoid blindly giving a stranger your debit card information or social security number over the phone, but these scammers are glib and depend on gullibility. The first line of defense is to be conscious about your cash flow.

“I think it’s a good idea to understand your overall situation in broad brushstrokes,” he says. “I would recommend keeping a line of communication open if someone is financing you and make sure that situation hasn’t changed and the bills are being paid.”

If you are paying your own way, Lavelle says it’s paramount to know exactly how much you owe and when to pay it. He also says to be aware of deferment programs available for those in a financial funk.

Another simple but sure-fire solution: don’t pick up the phone.

“If you do a simple Google news search, what you’ll see is hundreds of results, literally almost every day from local news sites where the police department or the sheriff’s office say, ‘Don’t pick up your phone, don’t talk to these people that claim you owe money from the IRS,’” says Lavelle.

Technological tools like PeopleLooker are also helpful in staying wise on who’s calling.

PeopleLooker, which is geared toward millennials, offers a reverse phone lookup that can be useful to dig up dirt on a Tinder date or get the deets on a mystery caller. PeopleLooker has a “spam score” to let users know the likelihood of the caller being a fraud.

Lavelle says the student debt crisis is not a new topic, but getting educated on ways to stay on top of it can eliminate scams and extra stress.

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