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- Scammers exploit uncertainty around nationwide student loan forgiveness.
- “Biden loan forgiveness” is a common promise perpetrators use but it’s not authentic.
- Public Service Loan Forgiveness program is an actual federal forgiveness utility.
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Scammers’ Predilection towards Student Loan Borrowers
Student loan scams are frequent due to persisting ambiguity about student loan forgiveness. Scammers prey on distraught borrowers who might be at their wits’ end. They make alluring promises of immediate total loan forgiveness, but actual government programs necessitate several years of repayments in a qualification-based employment before forgiveness is applicable.
Scammers advertise non-existent programs like “Biden loan forgiveness” or “stimulus forgiveness”, and may pretend to be the Department of Education, using complex language to trick the borrower.
Be vigilant of these scams and inform yourself about legitimate routes to forgiveness.
Recognizing Student Loan Forgiveness Scams
A fraudster might offer to help you consolidate your loans, defer your payments, or alter your repayment scheme — all for an upfront fee. You can avail these aids free of cost by reaching out to your student loan servicer.
Sometimes, fraudsters may not ask for money but instead, aim for your personal information such as your Social Security number, Federal Student Aid password, or bank account details.
Calls and emails from scammers might seem genuine. They could use official sounding titles, agent IDs, and may even know the amount of your student loan debt. Even if they possess this information, don’t immediately trust them — this information could have been illegally acquired. They may then create a sense of urgency by claiming their program operates on a first-come, first-serve basis with immediate results.
Protection Measures against Scams
Follow these steps to keep yourself safe from predatory loan forgiveness scams:
- Stick to government websites: Use https://studentaid.gov/ for official data on forgiveness programs and repayment options.
- Avoid upfront payments: Free assistance is available through the government or credible non-profit organizations.
- Be wary of unsolicited offers: If you have not initiated the contact, be skeptical.
- Conduct a background check on companies: Verify from Better Business Bureau or your state’s Attorney General website if any complaints have been filed against the company contacting you.
Scammed? Here’s What to do Next
If you believe you have been a victim of such a scam, take the following actions immediately:
- File a complaint with the Federal Trade Commission.
- Change your Federal Student Aid password.
- Contact your lender and cancel any third-party authorization or power of attorney agreement given to your servicer.
- Get in touch with your bank and stop any payments processing towards debt relief programs.
Authentic Forgiveness Programs
There exist forgiveness programs like Public Service Loan Forgiveness and the Income-Driven Repayment Plan for federal student loans which have no charges for application or enrolment, contrary to what scammers might lead you to believe.
Your loans might even be discharged in case of total and permanent disability, if your school shuts down during your enrolment or under certain other circumstances. The Department of Education has forgiven student debt for some defrauded borrowers and some borrowers with disabilities.
However, large scale student debt cancellation might take place under the Biden administration, with proposals ranging between $10,000 and $50,000 of debt to be cancelled. Still, the federal government hasn’t definitively committed any action and is probing into the legality of cancelling student debt by executive command.
FAQs
If you’ve been deceived by a scam, report it to the Federal Trade Commission, your State Attorney General or the Department of Education.
Yes, there are organisations that can help manage your student loans. Non-profit organisations often provide free aid but be careful of for-profit companies charging fees.
Legitimate student loan forgiveness programs include Public Service Loan Forgiveness (PSLF), Income-Driven Repayment (IDR) forgiveness, and teacher forgiveness. You can find official details ONLY on https://studentaid.gov/.
Conclusion: Beware of Student Loan Scams
Avoid becoming a victim to these scams by staying informed and cautious when seeking assistance for your loans. Always use official government resources for safe and dependable guidance.
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