Biden Administration Increasing Efforts to Fight Student Loan Forgiveness Scams

Friday, October 7th, 2022 -- 10:00 AM

(By Meg Anderson, Wisconsin Public Radio) The Biden administration is increasing its efforts to fight scams aimed at taking advantage of borrowers applying for its expansive student loan forgiveness plan, senior administration officials announced Wednesday.

The administration's forgiveness program will cancel up to $20,000 in student loan debt for borrowers making less than $125,000 or $250,000 for households. The plan, which is projected to cost $400 billion, could benefit as many as 40 million Americans.

Since the relief was announced in August, the administration has released very little concrete information about what the application will look like or when it will be released. That vacuum has created an opportunity for scammers.

As NPR reported last month, some borrowers have already encountered student loan relief scams and misinformation in text messages, phone calls and emails, and experts say it's getting worse.

"This Biden forgiveness thing is Christmas, Thanksgiving and the Fourth of July all rolled into one for the scammers," says Betsy Mayotte, the president of the Institute of Student Loan Advisors, a nonprofit that offers free counseling to borrowers.

"The release they did today is a great step," Mayotte added. "There's only two things we can do as a community [to prevent fraud]. One is to educate borrowers and the other is enforcement." The administration is aiming to do both.

In order to hold scammers accountable, the administration plans to increase collaboration between the Department of Education and other federal agencies, including the Federal Trade Commission and the Consumer Financial Protection Bureau.

The administration will also share scam complaints with states more frequently, so state attorneys general can act faster to stop scams in their own jurisdictions, and plans to partner with social media influencers on a public awareness campaign.

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