Fake Sallie Mae Accounts Target Struggling Student Borrowers

Fake social media accounts claimed to give loan forgiveness due to the government shutdown.

New data from the Department of Education show the number of borrowers defaulting on their student loans has continued to increase in the last three years.
By + More

As the government shutdown stretches into its second week, some furloughed workers may be struggling to make payments on their student loans – and numerous scammers have taken notice.

In the days following the onset of the shutdown, several fake Twitter and Instagram accounts popped up under the guise of student lending giant Sallie Mae. They made a tempting offer to borrowers: because of the government shutdown, borrowers could apply for loan "forgiveness" that would clear their debt.

[READ: Closing the Financial Literacy Gap to Combat Student Debt]

The accounts appeared to target borrowers like Brittany Alexander of Jacobstown, N.J., who posted on Sallie Mae's Facebook page saying she had been furloughed due to the shutdown.

"What are you guys doing for those that have been affected by the government shutdown?," Alexander wrote. "My job has been closed, and I am out of work, making no money for who knows how long."

But in order to apply for such programs, borrowers would have to give their personal information, that could include Social Security numbers, birth dates or other account information. That's a trick that Scambook, a consumer protection website, said was an attempt for the account's operators to steal borrowers' identities. Representatives from Sallie Mae confirmed the accounts and the advertised promotion were hoaxes and said the company has no official account on Instagram.

"We spotted the hoax right away and moved quickly via social media to help ensure our customers were not taken advantage of, and media coverage from the start has also made clear that this is a hoax," a spokesperson from Sallie Mae said in a statement to U.S. News. "Several student groups shared our content with their followers and fans."

It's not the first time people have used student loans to collect information or money from borrowers.

In May 2010, the Department of Education's Office of the Inspector General announced a federal grand jury had indicted 51-year-old Denny Ray Hardin of Kansas City, Mo., for collecting more than $100 million from consumers. Hardin claimed he was a private banker and could issue promissory notes that could help people discharge student debt.

And in May 2012, a student loan forgiveness scam in South Carolina urged borrowers to send checks via United States Postal Service certified mail with a certain phrase that would supposedly wipe away their debt. In some cases, the scammers told borrowers to write their checks in a different color ink.

"Scammers lead consumers to believe that they have the secret to erase student loan debt or that the debt can be discharged due to the U.S. Constitution," said an alert from the South Carolina Department of Consumer Affairs. The department advised borrowers to never give out personal information to strangers and said if the offer "sounds too good to be true, then it probably is."

[ALSO: Student Loan Default Rates Rise for Sixth Year]

Nikki Lavoie, a spokesperson for Sallie Mae, says there are a number of options available for borrowers experiencing short-term financial difficulty, including those who may be furloughed.

"We are monitoring the situation closely and as always are prepared to assist customers facing financial difficulty," Lavoie says. "Every situation is different, so if customers are having difficulty, we ask that they contact us so we can work with them on a solution."

More News: