Student loans

Biden’s plan for student loans attracts lawsuits, scams and confusion

Scott Buchanan, executive director of the Student Loan Servicing Alliance, a trade group representing loan officers, said that since the program was announced, it was not uncommon for call centers to start the day with at least 2 000 people waiting to talk to someone. who might have more information. There’s little for repairers to do, he said, but encourage callers to sign up for Ministry of Education email updates.

As borrowers wait, debt forgiveness campaigners and loan managers say misinformation is growing and scammers are proliferating.

The Ministry of Education warned against fraud in its email promising weekly updates. “You may be contacted by a company telling you that they will help you obtain a loan discharge, forgiveness, cancellation or debt relief for a fee,” the message reads. “You never have to pay 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 issued alerts to borrowers.

Borrowers try to help each other on TikTok and Facebook. Hundreds of people have contributed dodgy voicemail recordings, encouraging others not to answer suspicious calls. Private Facebook groups where people share stories and seek advice have attracted curious users.

Debby Carter, an artist who lives in St. Petersburg, Florida, said she received a voicemail hours after Mr Biden’s announcement. Ms Carter, 65, said she went back to school in her 50s and had about $60,000 in federal loans.

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