White House warns of student loan scams before debt relief opening
The White House and Department of Education are warning student loan borrowers not to fall for scams related to debt relief before the Biden administration enacts student loan forgiveness.
Applications for the student debt relief program President Biden announced over the summer are set to open up in October, with scammers likely to try to take advantage of any confusion that could surround the initiative, the White House said on Wednesday.
“Learn more about the steps you should take ahead of time, and how to avoid student debt relief scams,” the White House tweeted, along with a graphic with tips for avoiding such scams.
The White House says borrowers should sign up for notifications for when the student loan debt forgiveness applications will be out, create a Federal Student Aid (FSA) ID, ensure loan providers have their current information and report scams to the Federal Trade Commission.
The Education Department also released a list with more tips to avoid scams.
The administration said student borrowers should not pay anyone money for debt relief, adding that the forgiveness application will be “free and easy to use.” Individuals should also not give away their FSA ID information, as the Education Department or a loan service provider would never ask for the information.
Officials also warn not to give anyone personal or financial information and know the risks of refinancing your student loans. The Education Department says federal student loans refinanced into private loans will no longer be eligible for debt relief.
The White House and Education Department have still not released the exact date when forgiveness applications will open, saying it should happen sometime this month.
Borrowers will hear directly from the Education Department when the applications open and whether or not they need to fill out an application
The department said it will already have enough information about some borrowers’ income that the person will not need to apply for the relief and it will automatically be applied to their account.
The government is offering up to $10,000 of relief to student loan borrowers making less than $125,000 a year and up to $20,000 to those who received Pell Grants.
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