The recent announcement of canceling up to $20,000 in student loan debt relief by President Joe Biden has brought cheers from supporters and jeers from those opposed to the move.
But the administration and others are concerned about scammers who seek to exploit those who might be confused about what’s needed to gain debt forgiveness.
Hoping to help borrowers avoid predators, the White House announced ongoing and expanded efforts across the administration to combat scams and misinformation.
Those efforts include educating borrowers about how to protect themselves and how they could accelerate efforts to share scam complaints with states.
“One of the most critical ways to prevent scams and protect borrowers from being taken advantage of is developing a clear, simple, and secure site for borrowers to apply for debt relief and have the most up-to-date information from trusted sources, such as the Department of Education, Federal Student Aid, and other administration agencies,” White House officials said in a release.
Additionally, officials asserted that the Federal Trade Commission (FTC) and Consumer Financial Protection Bureau (CFPB) have committed to working together to hold scammers accountable if they take advantage of borrowers.
The White House noted that over the past 18 months, the FTC had reached nearly $30 million in settlements, including refunds for tens of thousands of student borrowers who were illegally charged upfront fees and falsely promised reduced or eliminated student loan payments.
Earlier this year, the FTC won a $7.5 million judgment against Arete Financial Group and permanently banned the company from the student loan business for illegal upfront and monthly fees.
The CFPB took action against multiple entities and individuals since the beginning of 2021, including requiring nearly $8.7 million in refunds to consumers and banning several individuals from the debt-relief payment processing industry for assisting at least 30 related schemes that affected approximately 270,000 borrowers.
The Biden-Harris Administration student debt relief initiative could benefit as many as 40 million Americans, and officials said preventing scam artists from preying on borrowers is a top priority.
The U.S. Department of Education has developed “a clear, simple, and secure site for borrowers to apply for debt relief,” officials noted.
Also, the administration’s ongoing and expanded scam prevention and enforcement actions include releasing Student Debt Relief ‘Dos and Don’ts’ to help borrowers avoid scams.
Further, the Education Department said it’s releasing a list of simple actions borrowers should and should not take as the administration prepares to release the student debt relief application this month.
The administration also will share the dos and don’ts through multiple communication channels in various languages. It will work with stakeholders to ensure the list of actions reaches borrowers across the country.
