MICHIGAN, USA — In late August, President Biden announced a plan to cancel some federal student loan debt for students nationwide.
The plan will eliminate $10,000 of student loan debt for borrowers who earn less than $125,000 a year, or families earning less than $250,000. The plan also includes an additional $10,000 of student loan debt forgiven for recipients of Pell Grants.
Applications for student loan forgiveness won't be available to borrowers until "early October," according to a statement from the Biden administration at the beginning of September.
Now, the Better Business Bureau (BBB) is warning consumers that scammers are looking to take advantage of borrows seeking to cancel their debt.
The BBB has already received reports from consumers who are being targeted by scammers via fake loan forgiveness calls and emails.
The scammers target borrowers and will call or email them claiming to represent a new student loan forgiveness program. The scammers will tell you that in order to qualify for forgiveness, you will need to fill out an application online that asks for personal information. The application can include personal information like bank account information.
Scammers may also ask you to redirect loan payments to them in order to qualify or even tell you that you are required to pay an upfront fee.
For details on the student loan forgiveness program, visit ED.gov or StudentAid.gov. The government will never ask you to pay a fee or to redirect your loan payments to a new account.
The BBB shared some additional tips on how to avoid these scams:
- Only communicate with the Department of Education directly.
- Never pay fees for a free government program.
- Think twice about unsolicited calls, emails, or text messages.
- Don’t give in to scare tactics.
The BBB reports that they have not received any complaints of student loan forgiveness scams in Michigan as of yet.
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