Loan forgiveness scam targets students with debt

Don't Waste Your Money
Posted at 12:15 PM, Aug 30, 2016

This election season we are hearing a lot about college debt, and talk of reducing or even forgiving some student loans.

So when a woman heard about a loan forgiveness program from President Obama she was thrilled, until she learned she, like so many other recent grads, had just been scammed for several hundred dollars.

Facebook Ad Promises Aid

Nichelle Culver is struggling to pay off her college loans. So she was captivated by a Facebook ad that said "billions in student loan debt has been forgiven".

The ad, Culver said, stated that "Obama's giving away $15,000 for student loan forgiveness."

So she called the Washington, DC number in the ad, thinking it was a government program, and was told "I qualify for a $7,000 US Federal Grant, and you don't have to pay it back."

The "grant administrator" told her all she had to do was purchase a $300 dollar iTunes gift card, for an application fee. "He wanted the number on it," she said. "He said scratch it off."

So she did, but says instead of getting her grant, she got another request for more cash.

"They would need an additional $500. I was like $500? I just gave you $300, I'm not going to give any more," she said.

That's when Culver suspected a scam. So she called the number with me standing next to her. But as soon as I identified myself as a reporter, the man who answered immediately put me on permanent hold, with music playing for more than 15 minutes.

Warning Signs You Are Being Scammed

The FTC calls this the classic government grant scam.

  • Real government grants require a lengthy application process.
  • You will never be told "you are approved" for a loan, grant, or loan forgiveness without a complete application, credit check, and other requirements.
  • The government will never ask for an application fee via Western Union or iTunes, which cannot be traced.

All Culver can do now is file police reports, and warn others of the grant that was too good to be true.

And despite what some presidential candidates would like to see, there is no federal grant program currently in place to eliminate your student loan.

As always, don't waste your money.


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