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Student loan forgiveness scams on the rise on the heels of Biden's relief proposals

Student loans are certainly top of mind for many now more than ever, and scammers are taking advantage.

CHARLOTTE, N.C. — President-elect Joe Biden asked congress this week to cancel $10,000 in federal student debt for all borrowers and to extend the payment pause that’s scheduled to lapse this month. 

Student loans are certainly top of mind for many now more than ever, and scammers are taking advantage.

“You have a lot of programs now that offer relief to people and scammers know that," said Karen Moskowitz, consumer protection attorney for Charlotte Center for Legal Advocacy.

Moskowitz says the scammers are fishing for your personal information.

“They can apply for credit in your name, they can apply for loans in your name if they have a social security number, or sometimes just a date of birth, and name.”

The COVID relief bill that passed in December did not include an extension for the student loan payment pause that’s been in place since the start of the pandemic.

And for many, that’s stressful. A PEW research survey found 6 in 10 borrowers said it will be difficult or impossible for them to start making payments again right now.

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President-elect Biden is now pushing for congress to extend that payment pause…and forgive ten thousand dollars in debt for all federal borrowers.

But that hasn’t passed yet. And if it does, Moskowitz says you still won’t get a cold call from anyone.

For most, the forgiveness would happen automatically.

“You're not going to get a cold call from any of these government agencies," she said. "You're going to get a letter if there's something that you have to do affirmatively.”

And if you want to be sure, she says you can pretty easily confirm what's legitimate online.

“You can go to the education department website, there's a student loan website, and they have all the current information about which ones are eligible for COVID relief and which are not. And you can check the status of your loan if you want to," Moskowitz said. 

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“If you get a cold call and you're not sure about it, just get their contact information to hang up. And then you can google who you really need to contact.”

A reminder to take a pause if something seems too good to be true because these scammers know people are struggling, and they’re hoping it's enough to make you let your guard down.

“People are desperate, people have lost their jobs," Moskowitz  said. "They can't pay the rent, can't pay utilities. And so when they get a call, it seems like a lifeline to them. And most of the time, it is not.”

President-elect Biden has promised to extend the loan payment pause as soon as he’s inaugurated. Washington insiders predict bipartisan support. 

But the debt forgiveness part of his plan has some congressional pushback and a long way to go.

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