Scammers have targeted student loan borrowers for years, but the recent forgiveness announcement from President Biden has opened the door for many new scams.
The government canceling student loans for everyone sounds too good to be true. However, because it is actually happening, the impossible suddenly becomes believable.
Making matters worse is the confusion surrounding the legitimate program.
Department of Education Confusion Helps Scammers
Major details on the Biden cancellation program have changed. For example, the Department of Education abruptly changed the rules for borrowers with FFEL loans.
Worse yet, the application for forgiveness took nearly two months before it finally became available.
Amid this uncertainty, some borrowers will undoubtedly fall for scams offering forgiveness.
Sherpa Thought: I can think of several different forms these scams might take, but in the interest of not giving ideas to would-be scammers, I’ll omit them for now.
If I receive confirmed reports of existing scams, this article will be updated with details on how they work.
Some Borrowers Get News Secondhand
When President Biden first announced up to $20,000 of forgiveness, the news was everywhere.
However, it is worth noting that the headlines of the day don’t reach all borrowers. Many might only learn about it from friends or social media.
These borrowers might only be generally aware of the program and susceptible to scammers advertising a special relationship with the government.
First Exposure to Biden Forgiveness May Come from Scammers
The most extreme danger for a borrower is if information about forgiveness comes from a scammer first.
Imagine this sequence: A borrower learns about forgiveness from a scammer. They don’t believe it, but they check it out to see if the forgiveness is real. To the surprise of the borrower, the forgiveness is actually happening. At that point, the scammer will have earned tremendous credibility with the borrower.
If this happens, it will be difficult to prevent the borrower from falling for whatever the scammer is selling.
How the Department of Education Could Have Prevented Scams
This is a situation where some planning could have made an enormous difference.
If the application had been available from day one, it would have been much harder for scammers to jump into the process. Likewise, if the rules had been ironed out from day one, there would have been much less confusion.
Delays and uncertainty open the door for deception.
Getting Biden Forgiveness Without Getting Scammed
If you are interested in the one-time forgiveness program, the application is incredibly short, and it is now available on the Department of Education webpage.
Additionally, applying as soon as possible is the best approach.
Getting Away From Scammers
If you think you may have already fallen for a Biden Forgiveness Scam, all hope is not lost.
If you paid with a credit card, call your credit card company right away to dispute the payment. The credit card company could be a huge asset in this situation.