Student Loan Forgiveness Through Instagram?
NEW YORK (MainStreet) Now that the U.S. government is open for business--at least until January--will student loan scammers that exploited the shut down find it more difficult to ply their trade?
In the run-up to September 30, when the federal government turned out the lights on most of Washington, D.C., scammers were populating the photo-sharing site Instagram with phony accounts. One represented itself as an "official" account of Sallie Mae, the largest private originator of student loans and a big servicer of federal loans made by the Department of Education.
The attack on Instagram smacked of a phishing expedition. These bogus accounts claimed to be offering loan forgiveness to borrowers as a "government shutdown special", but only to those who gave up their personal information.
Brian Smith, an education reporter for MLive Media Group in Michigan, wrote that "a search of Instagram accounts on Wednesday (October 9) turned up more than a half-dozen of these accounts, all using the Sallie Mae name and logo and promising to forgive student loan debt." U.S. News & World Report cited similar attacks on Twitter.
Smith reported that one account said, "Due to the National Government shutdown, Sallie Mae will be issuing a loan forgiveness to the first 20k followers."
Sallie Mae, through its official Facebook and Twitter accounts, posted an alert to its Facebook page denying any forgiveness program through Instagram, most likely in response to customer inquiries.
"Thanks for asking!" the company posted. "We do not have a contest or sweepstakes on Instagram. You can follow us on Facebook and Twitter for official news."
A Sallie Mae spokesperson also told BuzzFeed that the accounts are a hoax and that its student loans are not affected by the shutdown.
Originally a government-sponsored entity when it launched in 1972 as the Student Loan Marketing Association, Sallie Mae began the transition to a private corporation in 1997, a process that was completed in 2004 when its federal charter was ended by Congress. It still services federal loans and manages some $180 billion in debt of student loan borrowers.
It is not clear if attempts were made to defraud students with federal loans by exploiting the government shutdown. The U.S. Department of Education said before the shutdown that the disbursement of student loans would not be interrupted. The Department's furloughed press spokespersons were not available for comment. It was not clear when a full complement of ED staffers would be back at work.
--Written by John Sandman for MainStreet