President Biden announced that his administration would cancel $10,000 in student loan debt for low-income federal borrowers (people who earn less than $125,000 or households earning below $250,000) and $20,000 for Pell Grant recipients.
KEY NOTES:
- President Joe Biden’s student loan debt relief plan is set to open in early October.
- Student loan scammers are trying to use President Joe Biden’s student loan debt relief plan to scam some students.
- Federal officials warn people to be more careful and watch out for scammers.
- The federal student loan debt relief program is free for everyone eligible.
With respect to President Biden’s announcement, the White House shared its plans to take decisive actions on student loan scammers nationwide. Hence, the administration shared some tips on how borrowers can avoid scams relating to the president’s debt cancellation plan.
What’s Up With President Biden’s One-Time Debt Cancellation Plan?
The debt cancelation plan is expected to launch in early October. When the program becomes active, borrowers will be able to apply for forgiveness. This plan is expected to favor about 40 million Americans. Of course, scammers may want to leverage this program to try to scam borrowers via phone calls, especially.
The White House Warning Regarding Student Loan Phone Call Scams
Since the program is not yet live, the White House hints that scammers may try to obtain borrowers’ personal information to bilk them for this debt relief. Hence, for borrowers who are eligible for this plan, it is important that they pay more attention to the phone calls and emails they may get within this period.
“Focus on getting information directly from the Department of Education,” says K. Michelle Grajales.
How To Avoid Potential Scams
To avoid being scammed in a time like this, eligible borrowers should contact the Education Department if they need clarification and be wary of anyone who contacts them unsolicited, claiming to be from a trusted agency. Other measures to take include:
- Don’t pay anyone for the debt relief program.
- Never share your FSA ID with anyone or any personal information at all.
- If you’re unsure who’s calling or emailing, hang up immediately.
- Use the contact information on the Education Department or your loan servicer’s official websites.
- Anyone who calls you and requests you need to pay them to help you have your loan(s) forgiven fast is definitely a scammer, as no one needs to pay to apply for this relief.
- Applications would open anytime this October, and you can apply through the official Federal Student Aid website. The application would also be available on paper afterward.
- Once live, borrowers will have until December 31, 2023, to apply.
If asked to provide your personal information, such as your FSA ID username or password, it’s a clear red flag. The Education Department and your loan servicer will never ask for personal information.
“If anyone says they need your FSA ID to help you, that’s a scam. Don’t do it. They can cut off contact between you and your servicer – and even steal your identity.” – Grajales.
