Avoiding Student Loan Forgiveness Scandals as Biden Mulls Decision

As students await a decision by US President Joe Biden on a possible extension of the moratorium on student loan payments, industry observers have warned of potential scams involving these payments.

Last week, 100 House and Senate members signed a letter calling on Biden to extend the current pause on student loan payments past August 31. Former President Donald Trump previously withheld these payments during the start of the ongoing COVID-19 pandemic and, after Biden followed suit, it has been extended until the end of this month.

White House press secretary Karine Jean-Pierre recently told reporters that Biden would “make a decision” on extending the pause once again soon. “I’ll let him speak,” said Jean-Pierre.

However, as Biden is currently considering the decision, some have reported receiving scam calls involving student loan forgiveness programs.

Many have warned of potential student loan forgiveness scandals ahead of President Joe Biden’s decision to possibly extend the pause on loan payments. Above, student loan debt holders attend a demonstration outside the entrance of White House staff to demand that Biden cancel student loan debt on July 27 in Washington, DC.
Gemal Countess / Getty

WATE-TV reporter Don Dare recently received one of these scam calls and reported it to the Better Business Bureau (BBB) ​​in Tennessee. A recording of the call said, “We are calling because your student is eligible for the loan forgiveness program. We need your authorization to complete the process. Please call our office located in Tennessee at 423… Call BEEP.”

Soon after reporting the call, Dare spoke to Tony Binkley of the Better Business Bureau in Greater East Tennessee, who called the number.

“One of the questions I asked during our conversation was are you located in Tennessee? They said, no, we’re in Irvine, Calif. They’re a real business with a real address. However, their website is very suspicious. It’s very, very simple. It’s hard to get someone on the phone. There were just too many red flags … for me,” Binkley said, according to WATE.

“When someone’s contacting you directly, it’s dialing for dollars. They’re just dialing anybody,” the local news station quoted Binkley as saying. “Hopefully, they’ll get a hit, someone who actually has student loans—someone younger than you or me—hopes they can hunt down knowledge they don’t have.”

In April and May, the BBB, the Consumer Financial Protection Bureau (CFPB) and the Federal Trade Commission (FTC) all warned of potential student loan forgiveness scams.

“Scammers can promise a loan forgiveness program – which most people won’t qualify for. Or they can say they’ll wipe you out by disputing your loans. But they can’t get you into a forgiveness program for which you qualify.” or wipe out your debts,” the FTC said in a May 27 press release. The FTC encourages students to avoid these scams by not sharing your Federal Student Aid (FSA) ID.

In a similar press release, the CFPB said, “Many student loan borrowers recently submitted complaints to the Consumer Financial Protection Bureau about companies that charged them with student loan forgiveness or loans in exchange for hundreds or thousands of dollars in fees.” promised an apology.”

The press release continued, “Borrowers believed they were talking to their servants or a company authorized by the Department of Education because they often knew personal information such as the borrower’s loan balance or recent consolidation activity. This is fraudulent.” “

The CFPB also asked students to avoid these scams by keeping an eye on unnecessary fees for loan waiver payments and by not giving any personal information over the phone.

newsweek Contacted the FTC, CFPB and the Department of Education for comment.

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