Student debt scams flourish with rise in robocalls, advocates say

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The crushing weight of Michelle Lannon’s college debt — almost $200,000 in federal loans and $15,000 in a private loan — haunts her until she goes to sleep. When her cellphone rings with an unknown number, which happens daily, she tenses up.

“I keep telling myself: ‘Why did I do this? Why did I go to college?'” said Lannon, 48, who graduated in 2007 and works as a patient advocate for a biotech company in San Diego.

In recent months, the collection practices used by Navient Corp., one of the nation’s largest student-loan servicing companies with 12 million customers, has grown increasingly aggressive, she said: They called her sister; they called a number for her grandmother, who died a decade ago; they called a number for her father, who died three years ago; and they began calling her friend and housemate.

“I’m going to be dead, and they’re going to be at my grave with their hand out saying, ‘You owe us a payment,'” Lannon added.

Michelle Lannon of San Diego says her former college, ITT Technical Institute, put a student loan under her name without her permission.Courtesy Michelle Lannon

While she doesn’t dispute owing money on her federal loans, she believes the private loan currently through Navient was set up “illegally” by ITT Technical Institute based on past accusations by the federal government about misconduct. Lannon earned an associate’s degree in computer networking at ITT Tech, a for-profit college, before it closed in 2016 amid allegations of fraud and of steering students into predatory loans. Before the college filed for bankruptcy, school officials said those claims made during a government investigation were “without merit” and they intended to “vigorously defend ourselves against the charges.”

But in the years since, the investigation has led to multimillion-dollar settlements without ITT executives admitting to any wrongdoing, paving the way for some students’ debts to be forgiven depending on their lender. So far, Lannon hasn’t qualified.

“I’m stuck now. Nobody cares,” she said. “And all they want is their money.”

Navient was unable to comment on the details about Lannon’s case for privacy reasons, but said it has an online process for people to dispute a loan.

Lannon is emblematic of college graduates across the country saddled with student debt and prime targets for “bad actors” eager for a piece of the student loan industry and luring borrowers with a promise of action. While the use of robocalls, which deliver a prerecorded message to a person’s phone or connect a caller with a live operator, aren’t relegated to student debt collection, they are thriving: More than 11 million robocalls regarding student loans were made nationwide last month, appearing to more than double from a year earlier, according to the YouMail Robocall Index, which compiles robocalling data.





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