Biden administration steps up protection against student loan forgiveness scams
A MARTÍNEZ, HOST:
If you have student debt, maybe this is something you've experienced recently - a suspicious voicemail about your student loans.
(SOUNDBITE OF MONTAGE)
UNIDENTIFIED PERSON #1: We're just giving you a call in regards to your student loan.
UNIDENTIFIED PERSON #2: In order for you to qualify, you must apply within the next 24 hours.
UNIDENTIFIED PERSON #3: It's urgent that you return my call to complete your application prior to when payments resume.
LEILA FADEL, HOST:
Nobody legitimate is calling you to demand you apply for student loan forgiveness. These are scams. And these calls have been rampant since President Biden announced his plan for federal student loan forgiveness. Now the White House is working to crack down on the scammers.
MARTÍNEZ: NPR's Meg Anderson joins us now to tell us more. Meg, what types of scams are borrowers seeing?
MEG ANDERSON, BYLINE: Yeah. So in addition to calls like the ones you just heard, borrowers are getting texts and emails from people trying to get their personal information or asking them to pay a fee. And yeah, to be clear, borrowers don't have to do anything yet in order to benefit from Biden's plan to cancel up to $20,000 in their loans, but there's been very little information from the government about how to apply, what the application will look like or when it will be released. I spoke with Betsy Mayotte. She runs a nonprofit that advises borrowers. And she says because so many people are potentially eligible for this relief - it's about 40 million - that that has opened up the floodgates to fraud.
BETSY MAYOTTE: I saw scam activity as early as the afternoon of the day they made the announcement on August 24.
MARTÍNEZ: Wow, so right away. Then what's the White House planning to do to deal with these scammers?
ANDERSON: So first, they're focusing on holding scammers accountable. To do that, the White House says it's going to increase communication between the Education Department and other key federal agencies, like the Federal Trade Commission. The government is also planning to send borrower complaints directly to states so they can act faster to stop scams, too. Here's Richard Cordray. He's in charge of the branch of the Education Department that handles student loans.
RICHARD CORDRAY: We want to be on top of this so that we are hitting the scams in real time and knocking them out and making sure people have the right information to go to the right place to get the relief they deserve.
ANDERSON: But a lot of this effort to prevent fraud falls heavily on the shoulders of borrowers.
MARTÍNEZ: How can borrowers, then, protect themselves?
ANDERSON: So first, don't pay anyone who is promising you student loan forgiveness. The official application is going to be free. Don't give out personal financial information over the phone to an unknown caller. Borrowers use an ID to log into their loan account - don't share that. And if you do get scam calls or if you fall for one, which happens, don't be embarrassed, but you should report it. And you can do that online at reportfraud.ftc.gov.
MARTÍNEZ: Meg, wouldn't it be helpful if the Education Department actually released forgiveness applications? I mean, what have they said about this? It seems like that would make a lot of sense.
ANDERSON: Yeah. So I put that question to Cordray this week, and he said they're working at warp speed to get a clear and easy application out. But they still haven't released any more concrete details on when that will be. Mayotte, who runs the loan advising group, said releasing the application will be helpful in some ways, but...
MAYOTTE: If I know the scammers, they'll use that as an opportunity, too. The application's out. Let us help you to make sure you don't miss it.
ANDERSON: She called it a Catch-22. Scammers are thriving in the waiting period, but the fear is they'll thrive afterwards, too.
MARTÍNEZ: Just don't answer the phone. That's the solution.
NPR's Meg Anderson - Meg, thanks.
ANDERSON: Thank you.
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