As the U.S. Department of Education finalizes its student loan forgiveness program, the White House has stepped up efforts to protect borrowers – eager for loan relief – from the growing number of scams that target millions of people who may be eligible for forgiveness.
The debt forgiveness plan, announced in August, would wipe away up to $20,000 in student loan debt – $10,000 for most borrowers. It didn’t take long for scammers to try to exploit the situation.
As we reported last month, a common scheme involves an imposter, claiming to work for the “Biden Student Loan Forgiveness Program.” From there, the scam can move in different directions, with different goals.
In some cases, the scammer may say that you have to pay an upfront fee. Some are even brazen enough to tell victims they must redirect their regular student loan payments to them.
Full-scale offensive
The White House has now launched a full-scale counter-offensive against these scams. A key element is arming student loan borrowers with information.
As a first step, the White House is establishing a single, secure website to dispense facts about the forgiveness program. It will be the one place borrowers can go to receive vetted information.
Step two involves regulators and enforcement agencies. The Federal Trade Commission (FTC) and Consumer Financial Protection Bureau (CFPB) are working together to identify and take action against student loan scammers.
“Over the course…
