By Nathalie Voit
In one of the largest student loan forgiveness initiatives ever enacted by a sitting U.S. president, President Joe Biden approved $5.8 billion in targeted debt relief for over half a million borrowers who attended Corinthian Colleges. The historic announcement brought student loans back into the public discourse and the idea of broad loan forgiveness writ large.
While the U.S. Department of Education has yet to announce such a sweeping program, many scammers preying on desperate borrowers’ desire for financial help are already here. The FTC offered a few tips to prevent consumers from becoming victims of this latest fraud.
The federal agency advised borrowers seeking loan relief to apply only to select federal loan forgiveness programs. Reputable programs include the Public Service Loan Forgiveness (PSLF) and the Teacher Loan Forgiveness programs, among others. The Public Service Loan Forgiveness limited waiver program is another official program. For questions about qualifying for federal loan forgiveness, the agency advises borrowers to contact their loan servicer or the Department of Education directly.
The FTC warned to never give out your Federal Student Aid (FSA) ID to anyone. Bad actors could use the information on your FSA ID to steal your identity.
If a company requests an upfront fee for help, steer clear. “There’s nothing a company can do that you can’t do for yourself — for free,” the FTC said.
Beware of programs that promise fast loan forgiveness. They are scams.
Many scammers will pretend they are legitimate by faking a government seal. If there eventually is a broader federal student loan debt forgiveness plan, the FTC says an official announcement will come from the Department of Education. Random calls, texts, emails, or social media messages from companies promising to wipe out your loans are scams.
For more information on avoiding education scams, click here.
