Against the backdrop of mounting student loan debt and litigation over the Biden-Harris Administration’s Student Debt Relief Plan, an unexpected trend is playing out: Student loan scams are decreasing rapidly.
For a while, scammers regularly targeted borrowers seeking to alleviate their financial burden. Yet, according to Robokiller, student loan scams are plummeting at the very moment the debate over student loan forgiveness is front and center.
We break it all down.
According to estimates from the Department of Education, approximately 45 million borrowers owe upwards $1.5 trillion in unpaid student loans. Those aged 25-34 are particularly burdened — the vast majority owe between $10,000 to $40,000 — but all age groups face significant debt.
For many, paying back these loans is a tall task. Student loan debt has shown to prevent major life milestones — 8 in 10 Americans say they’ve delayed paying off other loans, investing, saving for retirement, traveling, buying a home, having children, getting married, and/or finding a job.
The scope of the problem is the precise reason why scammers sought to exploit borrowers — there’s plenty of targets and lots of money to be made. Yet, student loan robocalls dried up in recent weeks.
Student loan scammers pretend to be legitimate loan providers that help people manage their debt. They capitalize on borrowers’ desperation with the promise of forgiveness programs.
Unfortunately, these promises are false. Rather than receive assistance paying back their loans, borrowers who fall for these scams unknowingly give their money to thieves — all the while making no actual progress in reducing their debt.
Debate over student loan repayments has catapulted this particular scam. According to the Federal Communications Commission (FCC), student loan robocalls spiked in August 2022 following the announcement of the Biden-Harris Student Debt Relief Plan, just like they did in March 2020 when loan repayments were paused.
Despite the feverish debate over student loan forgiveness, student loan scams took a nosedive in recent weeks. Whereas from January through November 2022, scammers sent between 23-43 million student loan calls every month, they’re on pace to send just over 3 million in December — an 88% month-over-month decrease.
The sharp decline can be linked to action taken by the FCC. On November 10th, the agency issued a public notice that identified Urth Access as responsible for allowing student loan robocalls to pass through its network unchecked. The Bureau also sent a cease-and-desist letter formally warning the carrier to stop permitting this traffic — if they didn’t, the FCC would direct other providers to cut off their traffic. (Recently, the FCC did exactly that when it removed Global UC from its Robocall Mitigation Database for failure to mitigate scam robocalls).
Then, on December 8th, the FCC’s Robocall Response Team announced in a separate memo they had, in fact, authorized telecommunications companies to stop carrying student loan robocalls from Urth Access. If carriers refuse, they must report to the FCC what steps they’re taking to mitigate the traffic.
The FCC’s crackdown on student loan robocalls is significant in more ways than one. Not only has it significantly reduced the frequency of a harmful scam that targets a vulnerable population, it also establishes a pattern of government enforcement. In July, the FCC announced a series of actions to mitigate car warranty scams, the most common phone scam in existence. Since then, auto warranty scams have plummeted.
The FCC is proactively identifying the source of malicious robocalls and ordering complicit providers to take action, or else. This shows these scams can be mitigated. If government agencies, carrier networks, and third-party apps like Robokiller pull in the same direction, Americans will be much safer for it.
The FCC recommends that, if you do receive a robocall — whether it’s a student loan scam or otherwise — you should do the following:
In addition, Robokiller recommends taking these steps:
Robokiller exists to keep you safe from costly phone scams. With our app, you’ll be protected against 99.9% of malicious calls and texts. To date, we’ve saved Americans from over $400 million in losses to fraud.