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Home BUSINESS Biden's student loan plan attracts lawsuits, scams and confusion

Biden’s student loan plan attracts lawsuits, scams and confusion

Scott Buchanan, executive director of the Student Loan Servicing Alliance, a trade group that represents loan servicers, said that since the program was announced, it hasn’t been uncommon for call centers to start the day with at least 2,000 people waiting to speak with someone. Who can have more information? There is little for administrators to do, he said, but encourage callers to sign up for Department of Education Email Updates.

As borrowers wait, debt-forgiveness activists and loan servicers say misinformation is multiplying and scammers are rampant.

The Department of Education warned about fraud in your email by promising weekly updates. “You may be contacted by a business and told that they will help you get loan discharge, forgiveness, discharge, or debt relief for a fee,” the message read. “You never have to pay for aid with your federal student aid.”

Administration officials say they are in regular contact with the Consumer Financial Protection Bureau and the Federal Trade Commission to discuss ways to stay ahead of scammers, and that the FTC has issued alerts to borrowers.

Borrowers are trying to help each other on TikTok and Facebook. Hundreds have contributed recordings of shady voicemail messages encouraging others not to answer suspicious calls. Private Facebook groups where people share stories and ask for tips have attracted curious users.

Debby Carter, an artist who lives in St. Petersburg, Florida, said she received a voice mail message just hours after Biden’s announcement. Mrs. Carter, 65, said that she had gone back to school at age 50 and that she has about $60,000 in federal loans.

“This is a message from the Florida Student Loan Center located in Tampa,” said a male voice. “Our records indicate that you are eligible for a $10,000 deletion on your account. Call our Tampa office.”

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