FORT WAYNE, Ind. (WANE) – In three months, 43 million federal student loan borrowers are expected to resume payments on their student loans.

For many Americans, student loans are their introduction to debt. When the COVID-19 pandemic rocked the economy, these federal loans were put on a penalty free hold under the CARES Act. The extension was initially supposed to last for only six months, but former President Donald Trump and President Joe Biden extended it multiple times.

“As we all know the pandemic has sort of crunched family budgets, so not having to fork over those hundreds of dollar payments towards the federal government has been really beneficial to borrowers,” said Andrew Pentis, senior writer at Student Loan Hero Inc., and a certified student loan counselor. “It’s also been really helpful for borrowers who are already behind on their student loans. That’s because this pause has also given them the ability to stave off delinquency and default and all of those consequences such as wage garnishment.”

The last extension is expected to end in early 2022, with payments resuming in February. Pentis told WANE 15’s Briana Brownlee that the process of resuming payments will be complicated. The federal government is expected to shuffle the deck and other loan services could pick up a borrower’s loan.

With the last extension ending, new scams for student loan forgiveness are on the rise. The Better Business Bureau of Northeast Indiana said they have seen an increase in complaints regarding student loan forgiveness.

According to the BBB, there are two types of scams happening right now.

  1. Scammers are offering to lower a borrower’s payments through debt consolidation
  2. Scammers are promising to lower a borrower’s debt through student loan forgiveness

Both of these come at a cost, though, and not only a monetary amount, but your personal information such as your social security number.

“Always make sure you research the lender,” said Nichole Thomas, director of the Better Business Bureau of Northeast Indiana. “Anytime you get a phone call, email or text message out of the blue telling you that they can save you money, we recommend that you research that company.”

The easiest way to research whether a company is legitimate: Google the name of the company with ‘scam’ in the search bar, the BBB suggests.

Borrowers need to make sure they aren’t being led with a sense of urgency, Thomas said.

“Scammers are really good at trying to get you off your game, by giving them a scenario that may cause you to panic,” Thomas said. “We want you to remember that anytime someone tries to put you in a panic or put you in an emergency act situation. Just slow down, slow down and ask questions.”

Pentis said this is probably happening because of the student loan moratorium. He said that anytime there are major changes in the student loan industry, that opens up the gates for scams.

“The first red flag you have to be aware of is, if someone reaches out you over the phone. That in itself is a red flag because typically your federal loan servicer isn’t going to reach out to you over the phone even your private lender may not either,” Pentis said. “Typically the way you go about your loan and payment is that it’s you who is reaching out to your loan servicer.”

Pentis stressed that if the deal seems to good to be true, it usually is.

What you need to know before payments resume:

Before repayments are resumed, borrowers need to make sure that their contact information is up-to-date for the loan servicer.

“That is because they may be reaching out to you telling you about the resumption of payments or when your next payment will be due or perhaps the transition of your loan to a new loan servicer,” Pentis said.

Another tip: if your employment or circumstances changed, there is an income-driven program that can cap monthly payments.

“If you’re not feeling ready to resume your payments, tell your loan servicer, explore your options,” Pentis said. “There are deferments and forbearances, again, income-driven payment plans.”

Pentis said it’s best to have a plan now rather than wait until January to set a strategy.