March 28, 2024

Beware of Scammers Trying to Capitalize on Student Loan Forgiveness

Mike Pierce, executive director of the Student Borrower Protection Center, an advocacy group, said he had received at least two calls in recent days, even though he holds no federal student loans. “They’re not wasting any time,” he said.

In fact, nefarious callers have had ample time to prepare, since talk of student loan forgiveness has been percolating since Mr. Biden proposed it during the 2020 presidential campaign. Payments on most federal student loans were first temporarily suspended in March 2020, early in the pandemic, by the Trump administration. Mr. Biden extended the pause several times, and payments are now scheduled to resume after Dec. 31.

Even before the president’s recent action on loan forgiveness, scams based on the premise of securing help with student debt have kept federal regulators busy. Scam callers use the existence of legitimate, but often confusing, federal programs that can reduce monthly payments or forgive student debt, like the public service loan forgiveness option, to trick borrowers into paying illegal fees or sharing sensitive information. The F.T.C. has received nearly 49,000 complaints about student loans in the first eight months of this year, and about two-thirds of those were related to student loan debt relief, including scam calls, the agency said.

“Student debt cancellation is unprecedented, but these tactics are not new,” said Andrea Matthews, adviser to Rohit Chopra, the director of the Consumer Financial Protection Bureau.

Article source: https://www.nytimes.com/2022/09/02/your-money/spam-calls-student-loans.html

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