Federal student loan forgiveness should soon improve the finances of tens of millions of Americans. But if borrowers aren’t careful, they could fall into the trap of fraudsters out to steal their money with scam relief offers.
In the weeks since the Biden Administration announced its plan for loan forgiveness back in August, scammers have had ample time to prey on borrowers eager for their loans to be canceled. The scammers often promise early approval for the program or try to charge unsuspecting borrowers for access to a free relief program.
The Education Department is expected to release an application this month for the forgiveness program, which will cancel up to $10,000 in federal student loan debt for borrowers who earn less than $125,000 and up to $20,000 for qualified borrowers who received a need-based Pell Grant in college. But several lawsuits questioning the legality of the plan could further delay the timeline, ultimately leading to more confusion for borrowers and more opportunities for scammers.
In deep corners of the web, scam artists are selling tutorials that give instructions on how to dupe borrowers into thinking they can access loan forgiveness by sending payment or sharing their bank account credentials, according to fraud expert Kevin Lee at Sift, a digital trust and safety company.
Lee’s team keeps tabs on the backend of…
