AG says scammers are trying to take advantage of loan forgiveness excitement

Nessel: There's no rush, people don’t need to pay anyone and no one will call asking for personal information. If they do, it’s a scam.
Posted at 6:00 PM, Aug 26, 2022
and last updated 2022-08-26 18:00:49-04

(WXYZ) — Michigan Attorney General Dana Nessel is sounding the alarm about scammers taking advantage of President Joe Biden’s student loan forgiveness plan.

She says shortly after the plan was announced, she received a scam call saying in part:

“I do have you pre-qualified here for the updated forgiveness program and possibly even loan discharge. It is imperative that we go over the details as soon as possible just because it does look like your status will expire soon.”

Nessel explained she hasn’t had student loans in years.

She said there is no sense of urgency. If someone is eligible, they’ll always be eligible. She explained people don’t need to pay anyone for this program, and no one is going to call you out of the blue asking for personal information. If they do, Nessel said, it’s a scam.

Maxim Jenkins graduated from Michigan State University this past spring and is happy to hear about the loan forgiveness. He said it is upsetting to hear scammers are using it to take advantage of people.

“Everybody’s struggling so everybody’s trying to get by. But to do it criminally, especially to folks that are already down on their luck in some cases, is just really gross to me,” Jenkins said.

He understands how that kind of money involved can influence people’s behavior.

“They’re in a kind of emotional state where I feel like if they do get these calls, that if they’re professionally done, can really fool people. I mean, it almost got me a couple of times," Jenkins said.

Alan Castel is a professor of cognitive psychology at UCLA who studies the reasons people fall for scams.

“I think when we’re presented with things like loan forgiveness and it’s in the news and it’s all of a sudden, I have a loan and someone’s calling me about some good news, we might then engage in some decision making that might not be optimal,” Castel said.

He explained how money has an impact.

“I think any time we have debt or anything that has to do with money or making money, is going to trigger part of our brains that really respond to emotion like our amigdula. And as a result, it’s kind of this fight or flight where if we see an opportunity, we might take risks that we normally wouldn’t take,” Castel said.

He encourages people to take a breath and slow down.

“Take your time, don’t rush, check and verify. These aren’t limited time offers and even though it’s in the news, it doesn’t mean that you’re not going to be eligible if you’re not providing them with the information they’re requesting,” Castel said.

Nessel said anyone looking for information around student loan forgiveness should go to the U.S. Department of Education’s website