Student loans

Federal Communication Commission cracks down on student loan scammers

The The Federal Communication Commission told Urth Access LLC, a leading provider of robocall services used to power many student loan scams, that it must stop providing robocall software to groups running scams. This action could be enough to put an end to more than half of the current scams targeting student borrowers.

Student loan scams are not new but have proliferated following President Biden’s student debt relief announcement in August. With millions of borrowers eligible for relief, there are many potential targets for scammers. Borrowers, especially those struggling to repay their debts, are often in desperate need of help, making them easy targets for scam artists who promise to help get rid of loans for a fee. Not only do scammers take money from vulnerable borrowers, they often discourage those same borrowers from seeking the help they are entitled to, compounding the harm they cause.

Why is this FCC action important?

Robocalls are a main tool for scammers. Scammers can call tens or even hundreds of thousands of federal student loan borrowers for relatively low costs. Scammers know that a tiny fraction of borrowers will react or fall for what they peddle, but when dealing with millions of borrowers looking for help, getting a response from a tiny fraction of borrowers can pay off. lots of money to scammers.

In the press release announcing the action, FCC Chairman Jessica Rosenworcel said, “We are slamming the door on these pernicious calls – cutting them off to protect the millions of Americans who may be targeted simply because they have school loans. It’s a new, more nimble FCC tool that we’re quick to use here and won’t hesitate to use again in order to prevent these scam calls from making and reaching consumers. »

Reducing access to robocall technology is unlikely to eliminate student loan scams, but it will likely reduce their numbers. More importantly, it is expected to reduce the reach of scams, as the people operating them have to find new ways to operate on the scale that the scams rely on.

Why are student loan scams on the rise?

The Biden administration’s decision to forgive up to $20,000 in student loans for eligible borrowers made headlines across the country and inspired tens of millions of borrowers to apply for forgiveness. The scammers attempted to take advantage of the media buzz and desperate borrowers to have their loan charges waived or reduced.

What else is the Biden administration doing to help borrowers avoid scams?

Last month, the administration provided various tips to help borrowers spot scams. Resources included a fact sheet detailing its actions to crack down on scams and a long list of student loan debt relief do’s and don’ts designed to help borrowers safely navigate the student debt relief process.

In addition to providing advice to borrowers, the administration said it is working with various federal and state agencies, including the Consumer Financial Protection Bureau, the Federal Trade Commission and state attorneys general, to provide information about scams and coordinate responses. This FCC action appears to be part of that coordinated effort.

Multiple lawsuits complicated administration’s debt relief plan. Several lawsuits have already been dismissed, including two for which the Supreme Court chose not to hear appeals. However, a Texas district judge and the 8e The Circuit Court of Appeals put the plan on hold. Following the lawsuits, ED removed the debt relief request from its website as it call on 8e Supreme Court circuit decision.

The confusion and delays caused by these lawsuits can give scammers even more time and opportunity to exploit vulnerable borrowers.