By Eliza Haverstock | NerdWallet

As borrowers gear up for federal student loan bills resuming this fall, they face a revamped landscape that includes a new repayment plan, servicer switches and long call wait times. Another imminent concern: scammers who want to take advantage of the moment.

“Whenever there’s confusion in the marketplace, that’s when the criminal fraudsters get active,” says Clayton LiaBraaten, senior executive advisor at Truecaller, an app that blocks spam calls.

Borrowers need to protect themselves, even as regulators crack down on scammers. In August, the Federal Trade Commission (FTC) caught a group of scammers who brought in roughly $8.8 million with false promises of “Biden Loan Forgiveness” in exchange for hefty upfront fees. The group claimed to be affiliated with the U.S. Department of Education and primarily targeted borrowers via calls and texts, the FTC said.

If you receive an unsolicited call or text about your student loans, it’s probably a scam. Here’s how to spot and avoid a student loan repayment scam — and what to do if you think you’re a victim of one, according to experts.

What to watch out for

Student loan scams vary widely, but they often contain a few key ingredients. Here are some common red flags.

Advertising from the ‘government’

Scammers will often use the word “federal” in their communications, LiaBraaten says. They might claim federal or government affiliation, or they could claim to be connected with the Education Department or your student loan servicer.

Aggressive advertising language can also indicate that communication isn’t from the government.

“If you are a student loan borrower, you need to be aware that the federal government isn’t soliciting you,” says Leslie Tayne, a financial debt attorney. “If it sounds like a sales pitch with guarantees and promises, that’s not coming from the federal government.”

Relief that costs money

If someone asks you to pay an upfront or monthly fee to access debt relief, it’s a scam.

It’s always free to enroll in or benefit from any legitimate federal student loan relief, such as income-driven repayment (IDR) plans, borrower defense to repayment, Public Service Loan Forgiveness and the IDR account adjustment.

And if you have questions about your loans or repayment options, you can call your servicer for free guidance.

Promises that are too good to be true

Keep your guard up if you receive calls with promises of instant student loan relief. Most federal relief programs require at least a decade of payments to qualify — and no company or person has the ability to negotiate a special deal with your loan servicer or the government, warns the Education Department.

“Legitimate loan forgiveness programs usually have these strict eligibility criteria, so any sort of instant forgiveness is a red flag,” says Ally Armeson, program director of the nonprofit Cybercrime Support Network. Scammers see an opportunity with people panicking around repayment and try to position themselves as saviors, she says.

How scammers reach you

Student loan scammers can get creative with their contact methods. Here are a few to watch out for.

Robocalls

Think twice if your phone rings with an unknown number. In the first half of September, scammers placed more than 350,000 student loan-related robocalls, according to Transaction Network Services, a financial infrastructure firm.

“Beware of unsolicited calls or communication,” Armeson says. “That is the number-one way that a scammer will weasel into your life.”

Snail mail

Scammers may also send letters through the mail. Read them closely. Even if it seems official or formal, a scam letter will often include grammatical or spelling errors, the Education Department says.

Texts and social media

Increasingly, scammers are also targeting borrowers with texts and social media messages, Tayne says. Scams that began on social media have accounted for $2.7 billion in reported losses since 2021, more than any other contact method, the FTC said earlier this month.

Official Education Department text messages will only come from the numbers 227722 or 51592.

Email

Scammers may try to sneak into your inbox. If an email looks suspicious, double-check the sender.

Legitimate emails from the Education Department will only come from these senders:

noreply@studentaid.gov.
noreply@debtrelief.studentaid.gov.
ed.gov@public.govdelivery.com.

Protecting yourself from a student loan scam

Don’t engage if you receive a call about your student loans out of nowhere. Hang up if it’s a robocall; if a person is on the other side, quickly end the call.

“If someone says they are from a specific agency, department or loan servicer, just say, ‘you know what, let me hang up and do my research, and I’ll go from there by myself,’” Armeson says.

If you get an email or text about your student loans, don’t click on any links.

Use strong passwords and enable two-factor authentication on all of your online financial accounts, including your StudentAid.Gov and student loan servicer accounts, LiaBraaten says.

Never share your login information. With just your username and password, scammers can sign legally binding student loan documents electronically and make changes to your federal student loan account.

The Education Department and your servicer will never ask for your password.

What to do if you’re a student loan scam victim

If you believe a scammer has targeted you, immediately stop communicating with them. Then, take the following steps to get help and protect yourself from any further harm:

Contact your student loan servicer. Call your servicer and tell them what happened. Check the status of your loan and ask if the scammer did anything to your account.
Call your bank and credit card company. Ask them to stop any payments to a scammer.
Change your passwords. Change all passwords associated with your financial accounts and student loans, like your StudentAid.gov and servicer accounts.
Monitor your finances. Check to see if anyone has opened an unauthorized account or line of credit in your name. You can check your credit report for free each week on AnnualCreditReport.com.
Consider freezing your credit. If you think the scammer may have personal information, like your Social Security number, freeze your credit to prevent identity theft and fraud.
Save all communication records. If the scammer has texted or emailed you, save these records to send the information to the FTC and other law enforcement agencies.

Report possible scams to the FTC, which may use the report to spot trends, educate the public and bring cases against fraudsters in partnership with more than 2,800 law enforcement organizations.

If scammers took your money, the FTC will also give you advice on how to recover it. “The quicker you act, the better your chance of getting your money back,” the FTC website says.

You can also report the student loan scam to your state’s attorney general’s office or the Consumer Financial Protection Bureau for further assistance and investigation.

 

The article How to Protect Yourself From Student Loan Scams as Bills Resume originally appeared on NerdWallet.

By Eliza Haverstock | NerdWallet

As borrowers gear up for federal student loan bills resuming this fall, they face a revamped landscape that includes a new repayment plan, servicer switches and long call wait times. Another imminent concern: scammers who want to take advantage of the moment.

“Whenever there’s confusion in the marketplace, that’s when the criminal fraudsters get active,” says Clayton LiaBraaten, senior executive advisor at Truecaller, an app that blocks spam calls.

Borrowers need to protect themselves, even as regulators crack down on scammers. In August, the Federal Trade Commission (FTC) caught a group of scammers who brought in roughly $8.8 million with false promises of “Biden Loan Forgiveness” in exchange for hefty upfront fees. The group claimed to be affiliated with the U.S. Department of Education and primarily targeted borrowers via calls and texts, the FTC said.

If you receive an unsolicited call or text about your student loans, it’s probably a scam. Here’s how to spot and avoid a student loan repayment scam — and what to do if you think you’re a victim of one, according to experts.

What to watch out for

Student loan scams vary widely, but they often contain a few key ingredients. Here are some common red flags.

Advertising from the ‘government’

Scammers will often use the word “federal” in their communications, LiaBraaten says. They might claim federal or government affiliation, or they could claim to be connected with the Education Department or your student loan servicer.

Aggressive advertising language can also indicate that communication isn’t from the government.

“If you are a student loan borrower, you need to be aware that the federal government isn’t soliciting you,” says Leslie Tayne, a financial debt attorney. “If it sounds like a sales pitch with guarantees and promises, that’s not coming from the federal government.”

Relief that costs money

If someone asks you to pay an upfront or monthly fee to access debt relief, it’s a scam.

It’s always free to enroll in or benefit from any legitimate federal student loan relief, such as income-driven repayment (IDR) plans, borrower defense to repayment, Public Service Loan Forgiveness and the IDR account adjustment.

And if you have questions about your loans or repayment options, you can call your servicer for free guidance.

Promises that are too good to be true

Keep your guard up if you receive calls with promises of instant student loan relief. Most federal relief programs require at least a decade of payments to qualify — and no company or person has the ability to negotiate a special deal with your loan servicer or the government, warns the Education Department.

“Legitimate loan forgiveness programs usually have these strict eligibility criteria, so any sort of instant forgiveness is a red flag,” says Ally Armeson, program director of the nonprofit Cybercrime Support Network. Scammers see an opportunity with people panicking around repayment and try to position themselves as saviors, she says.

How scammers reach you

Student loan scammers can get creative with their contact methods. Here are a few to watch out for.

Robocalls

Think twice if your phone rings with an unknown number. In the first half of September, scammers placed more than 350,000 student loan-related robocalls, according to Transaction Network Services, a financial infrastructure firm.

“Beware of unsolicited calls or communication,” Armeson says. “That is the number-one way that a scammer will weasel into your life.”

Snail mail

Scammers may also send letters through the mail. Read them closely. Even if it seems official or formal, a scam letter will often include grammatical or spelling errors, the Education Department says.

Texts and social media

Increasingly, scammers are also targeting borrowers with texts and social media messages, Tayne says. Scams that began on social media have accounted for $2.7 billion in reported losses since 2021, more than any other contact method, the FTC said earlier this month.

Official Education Department text messages will only come from the numbers 227722 or 51592.

Email

Scammers may try to sneak into your inbox. If an email looks suspicious, double-check the sender.

Legitimate emails from the Education Department will only come from these senders:

noreply@studentaid.gov.
noreply@debtrelief.studentaid.gov.
ed.gov@public.govdelivery.com.

Protecting yourself from a student loan scam

Don’t engage if you receive a call about your student loans out of nowhere. Hang up if it’s a robocall; if a person is on the other side, quickly end the call.

“If someone says they are from a specific agency, department or loan servicer, just say, ‘you know what, let me hang up and do my research, and I’ll go from there by myself,’” Armeson says.

If you get an email or text about your student loans, don’t click on any links.

Use strong passwords and enable two-factor authentication on all of your online financial accounts, including your StudentAid.Gov and student loan servicer accounts, LiaBraaten says.

Never share your login information. With just your username and password, scammers can sign legally binding student loan documents electronically and make changes to your federal student loan account.

The Education Department and your servicer will never ask for your password.

What to do if you’re a student loan scam victim

If you believe a scammer has targeted you, immediately stop communicating with them. Then, take the following steps to get help and protect yourself from any further harm:

Contact your student loan servicer. Call your servicer and tell them what happened. Check the status of your loan and ask if the scammer did anything to your account.
Call your bank and credit card company. Ask them to stop any payments to a scammer.
Change your passwords. Change all passwords associated with your financial accounts and student loans, like your StudentAid.gov and servicer accounts.
Monitor your finances. Check to see if anyone has opened an unauthorized account or line of credit in your name. You can check your credit report for free each week on AnnualCreditReport.com.
Consider freezing your credit. If you think the scammer may have personal information, like your Social Security number, freeze your credit to prevent identity theft and fraud.
Save all communication records. If the scammer has texted or emailed you, save these records to send the information to the FTC and other law enforcement agencies.

Report possible scams to the FTC, which may use the report to spot trends, educate the public and bring cases against fraudsters in partnership with more than 2,800 law enforcement organizations.

If scammers took your money, the FTC will also give you advice on how to recover it. “The quicker you act, the better your chance of getting your money back,” the FTC website says.

You can also report the student loan scam to your state’s attorney general’s office or the Consumer Financial Protection Bureau for further assistance and investigation.

 

The article How to Protect Yourself From Student Loan Scams as Bills Resume originally appeared on NerdWallet.

By Julie Appleby, KFF Health News

Consumers know it’s fall when stores start offering Halloween candy and flu shots — and airwaves and mailboxes are filled with advertisements for Medicare options.

It’s annual open enrollment time again for the 65 million Americans covered by Medicare, the federal health program for older people and some people with disabilities.

From Oct. 15 to Dec. 7, enrollees in either the traditional program or Medicare Advantage plans, which are offered by private insurers, can change their coverage. (First-time enrollees generally sign up within a few months of their 65th birthday, whether that’s during open enrollment season or not.)

There are a few new features for 2024, including a lower out-of-pocket cost limit for some patients taking expensive drugs.

No matter what, experts say, it’s a good idea for beneficiaries to examine their current coverage because health and drug plans may have made changes — including to the pharmacies or medical providers in their networks and how much prescriptions cost.

“The advice is to check, check, and double-check,” said Bonnie Burns, a consultant with California Health Advocates, a nonprofit Medicare advocacy program.

But as anyone in the program or who helps friends or relatives with coverage decisions knows, it is complicated.

Here are a few things to keep in mind.

Know the Basics: Medicare vs. Medicare Advantage

People in traditional Medicare can see any participating doctor or hospital (and most do participate), while those in Medicare Advantage must select from a specified list of providers — a network — unique to that plan. Some Advantage plans offer a broader network than others. Always check to see if your preferred doctors, hospitals and pharmacies are covered.

Because traditional Medicare doesn’t cover prescriptions, its members should also consider signing up for Part D, the optional drug benefit, which includes a separate premium.

Conversely, most Medicare Advantage plans include drug coverage, but make sure before enrolling because some don’t. These private plans are advertised heavily, often touting that they offer “extras” unavailable in traditional Medicare, such as dental or vision coverage. Read the fine print to see what limits, if any, are placed on such benefits.

Those 65 and older joining traditional Medicare for the first time can buy a supplemental, or “Medigap,” policy, which covers many out-of-pocket costs, such as deductibles and copays, which can be substantial. Generally, beneficiaries have a six-month window after they enroll in Medicare Part B to purchase a Medigap policy.

So, switching from Medicare Advantage back to traditional Medicare during open enrollment can raise issues for those who want to buy a supplemental Medigap policy. That’s because, with some exceptions, private insurers offering Medigap plans can reject applicants with health conditions, or raise premiums or limit coverage of preexisting conditions.

Some states offer beneficiaries more guarantees that they can switch Medigap plans without answering health questions, although rules vary.

Making all of this more confusing, there is a second open enrollment period each year, but it’s only for those in Medicare Advantage plans. They can change plans, or switch back to traditional Medicare, from Jan. 1 to March 31.

Drug Coverage Has Changed — For the Better

Beneficiaries who signed up for a Part D drug plan or get drug coverage through their Medicare Advantage plan know there are a lot of copays and deductibles. But in 2024, for those who require a lot of high-priced medications, some of these expenses will disappear.

President Joe Biden’s Inflation Reduction Act places a new annual limit on Medicare beneficiaries’ out-of-pocket costs for drugs.

“That policy is going to help people who have very expensive medications for conditions like cancer, rheumatoid arthritis, and hepatitis,” said Tricia Neuman, senior vice president and head of the KFF Medicare policy program.

The cap will greatly help beneficiaries who fall into Medicare’s “catastrophic” coverage tier — an estimated 1.5 million Americans in 2019, according to KFF.

Here’s how it works: The cap is triggered after patients and their drug plans spend about $8,000 combined on drugs. KFF estimates that, for many patients, that means about $3,300 in out-of-pocket spending.

Some people could hit the cap in a single month, given the high prices of many drugs for serious conditions. After reaching the cap, beneficiaries don’t have to pay anything out-of-pocket for their medicines that year, potentially saving them thousands of dollars annually.

It’s important to note that this new cap won’t apply to drugs that are infused into patients, generally at doctor’s offices, such as many chemotherapies for cancer. Those medicines are covered by Medicare Part B, which pays for doctor visits and other outpatient services.

Medicare next year is also expanding eligibility for some low-income beneficiaries to qualify for low- or zero-premium drug coverage that comes with no deductibles and lower copayments, according to the Medicare Rights Center.

Insurers offering Part D and Advantage plans might have also made other changes to drug coverage, Burns said.

Beneficiaries should check their plan’s “formulary,” a list of covered drugs, and how much they must pay for the medications. Be sure to note whether prescriptions require a copayment, which is a flat dollar amount, or coinsurance, which is a percentage of the drug cost. Generally, copayments mean lower out-of-pocket costs than coinsurance, Burns said.

Help Is Available

In many parts of the country, consumers have a choice of more than 40 Medicare Advantage plans. That can be overwhelming.

Medicare’s online plan finder provides details on the Advantage and Part D drug plans available by ZIP code. It allows users to drill down into details about benefits and costs and each plan’s network of health providers.

Insurers are supposed to keep their provider directories up to date. But experts say enrollees should check directly with doctors and hospitals they prefer to confirm they participate in any given Advantage plan. People concerned about drug costs should “check whether their pharmacy is a ‘preferred’ pharmacy and if it’s in network” under their Advantage or Part D plan, Neuman said.

“There can be a significant difference in out-of-pocket spending between one pharmacy and another, even in the same plan,” she said.

To get the fullest picture of estimated drug costs, Medicare beneficiaries should look up their prescriptions, the dosages, and their pharmacies, said Emily Whicheloe, director of education at the Medicare Rights Center.

“For people with specific drug needs, it’s also a good idea to contact the plan and say, ‘Hey, are you still covering this drug next year?’ If not, change to a plan that is,” she said.

Additional help with enrollment can be had for free through the State Health Insurance Assistance Program, which operates in all states.

Beneficiaries can also ask questions via a toll-free hotline run by Medicare: 1-800-633-4227, or 1-800-MEDICARE.

Insurance brokers can also help, but with a caveat. “Working with a broker can be nice for that personalized touch, but know they might not represent all the plans in their state,” said Whicheloe.

Whatever you do, avoid telemarketers, Burns said. In addition to TV and mail advertisements, telephone calls hawking private plans bombard many Medicare beneficiaries.

”Just hang up,” Burns said.

KFF Health News, formerly known as Kaiser Health News (KHN), is a national newsroom that produces in-depth journalism about health issues and is one of the core operating programs of KFF — the independent source for health policy research, polling and journalism.

©2023 KFF Health News. Distributed by Tribune Content Agency, LLC.

By Julie Appleby, KFF Health News

Consumers know it’s fall when stores start offering Halloween candy and flu shots — and airwaves and mailboxes are filled with advertisements for Medicare options.

It’s annual open enrollment time again for the 65 million Americans covered by Medicare, the federal health program for older people and some people with disabilities.

From Oct. 15 to Dec. 7, enrollees in either the traditional program or Medicare Advantage plans, which are offered by private insurers, can change their coverage. (First-time enrollees generally sign up within a few months of their 65th birthday, whether that’s during open enrollment season or not.)

There are a few new features for 2024, including a lower out-of-pocket cost limit for some patients taking expensive drugs.

No matter what, experts say, it’s a good idea for beneficiaries to examine their current coverage because health and drug plans may have made changes — including to the pharmacies or medical providers in their networks and how much prescriptions cost.

“The advice is to check, check, and double-check,” said Bonnie Burns, a consultant with California Health Advocates, a nonprofit Medicare advocacy program.

But as anyone in the program or who helps friends or relatives with coverage decisions knows, it is complicated.

Here are a few things to keep in mind.

Know the Basics: Medicare vs. Medicare Advantage

People in traditional Medicare can see any participating doctor or hospital (and most do participate), while those in Medicare Advantage must select from a specified list of providers — a network — unique to that plan. Some Advantage plans offer a broader network than others. Always check to see if your preferred doctors, hospitals and pharmacies are covered.

Because traditional Medicare doesn’t cover prescriptions, its members should also consider signing up for Part D, the optional drug benefit, which includes a separate premium.

Conversely, most Medicare Advantage plans include drug coverage, but make sure before enrolling because some don’t. These private plans are advertised heavily, often touting that they offer “extras” unavailable in traditional Medicare, such as dental or vision coverage. Read the fine print to see what limits, if any, are placed on such benefits.

Those 65 and older joining traditional Medicare for the first time can buy a supplemental, or “Medigap,” policy, which covers many out-of-pocket costs, such as deductibles and copays, which can be substantial. Generally, beneficiaries have a six-month window after they enroll in Medicare Part B to purchase a Medigap policy.

So, switching from Medicare Advantage back to traditional Medicare during open enrollment can raise issues for those who want to buy a supplemental Medigap policy. That’s because, with some exceptions, private insurers offering Medigap plans can reject applicants with health conditions, or raise premiums or limit coverage of preexisting conditions.

Some states offer beneficiaries more guarantees that they can switch Medigap plans without answering health questions, although rules vary.

Making all of this more confusing, there is a second open enrollment period each year, but it’s only for those in Medicare Advantage plans. They can change plans, or switch back to traditional Medicare, from Jan. 1 to March 31.

Drug Coverage Has Changed — For the Better

Beneficiaries who signed up for a Part D drug plan or get drug coverage through their Medicare Advantage plan know there are a lot of copays and deductibles. But in 2024, for those who require a lot of high-priced medications, some of these expenses will disappear.

President Joe Biden’s Inflation Reduction Act places a new annual limit on Medicare beneficiaries’ out-of-pocket costs for drugs.

“That policy is going to help people who have very expensive medications for conditions like cancer, rheumatoid arthritis, and hepatitis,” said Tricia Neuman, senior vice president and head of the KFF Medicare policy program.

The cap will greatly help beneficiaries who fall into Medicare’s “catastrophic” coverage tier — an estimated 1.5 million Americans in 2019, according to KFF.

Here’s how it works: The cap is triggered after patients and their drug plans spend about $8,000 combined on drugs. KFF estimates that, for many patients, that means about $3,300 in out-of-pocket spending.

Some people could hit the cap in a single month, given the high prices of many drugs for serious conditions. After reaching the cap, beneficiaries don’t have to pay anything out-of-pocket for their medicines that year, potentially saving them thousands of dollars annually.

It’s important to note that this new cap won’t apply to drugs that are infused into patients, generally at doctor’s offices, such as many chemotherapies for cancer. Those medicines are covered by Medicare Part B, which pays for doctor visits and other outpatient services.

Medicare next year is also expanding eligibility for some low-income beneficiaries to qualify for low- or zero-premium drug coverage that comes with no deductibles and lower copayments, according to the Medicare Rights Center.

Insurers offering Part D and Advantage plans might have also made other changes to drug coverage, Burns said.

Beneficiaries should check their plan’s “formulary,” a list of covered drugs, and how much they must pay for the medications. Be sure to note whether prescriptions require a copayment, which is a flat dollar amount, or coinsurance, which is a percentage of the drug cost. Generally, copayments mean lower out-of-pocket costs than coinsurance, Burns said.

Help Is Available

In many parts of the country, consumers have a choice of more than 40 Medicare Advantage plans. That can be overwhelming.

Medicare’s online plan finder provides details on the Advantage and Part D drug plans available by ZIP code. It allows users to drill down into details about benefits and costs and each plan’s network of health providers.

Insurers are supposed to keep their provider directories up to date. But experts say enrollees should check directly with doctors and hospitals they prefer to confirm they participate in any given Advantage plan. People concerned about drug costs should “check whether their pharmacy is a ‘preferred’ pharmacy and if it’s in network” under their Advantage or Part D plan, Neuman said.

“There can be a significant difference in out-of-pocket spending between one pharmacy and another, even in the same plan,” she said.

To get the fullest picture of estimated drug costs, Medicare beneficiaries should look up their prescriptions, the dosages, and their pharmacies, said Emily Whicheloe, director of education at the Medicare Rights Center.

“For people with specific drug needs, it’s also a good idea to contact the plan and say, ‘Hey, are you still covering this drug next year?’ If not, change to a plan that is,” she said.

Additional help with enrollment can be had for free through the State Health Insurance Assistance Program, which operates in all states.

Beneficiaries can also ask questions via a toll-free hotline run by Medicare: 1-800-633-4227, or 1-800-MEDICARE.

Insurance brokers can also help, but with a caveat. “Working with a broker can be nice for that personalized touch, but know they might not represent all the plans in their state,” said Whicheloe.

Whatever you do, avoid telemarketers, Burns said. In addition to TV and mail advertisements, telephone calls hawking private plans bombard many Medicare beneficiaries.

”Just hang up,” Burns said.

KFF Health News, formerly known as Kaiser Health News (KHN), is a national newsroom that produces in-depth journalism about health issues and is one of the core operating programs of KFF — the independent source for health policy research, polling and journalism.

©2023 KFF Health News. Distributed by Tribune Content Agency, LLC.