In early July, the Biden administration canceled nearly $ 56 million in student loan arrears, mostly related to organizations committing misconduct, including promising jobs or false claims to transfer loans to universities.
Student loan forgiveness is an increasingly popular scam targeting young people, and as the October deadline approaches, consumer advocates are warning people to watch their wallets.
Tami Barrett, manager of the Lincoln and Nebraska-based Better Business Bureau, expects to see an increase in fraud this fall as the current pause in federal student loans due to COVID-19 comes to a close on October 1.
“A lot of people think they’re just old people,” Barrett said. “But in fact (the Federal Trade Commission) and the Better Business Bureau show that 44% of the people who are being cheated are between the ages of 20 and 29.”
In comparison, only 20% of people between the ages of 70 and 79 have lost money due to fraud.
People with student loan debt represent a gigantic target for scammers. According to the US Department of Education, 43 million US student loan borrowers owe a total of $ 1.6 trillion in student loans.
The average household in the United States with student loans owes more than $ 57,000, with the largest debt owed to women and people of color.
Barrett said the scammers are likely to offer a free grace period and bogus “President Biden’s loan forgiveness plans.”
She said that the purpose of the fraud is to steal money from young people or their personal data.
Barrett said there are ways to avoid falling prey to scammers.
“Never settle for upfront payments,” Barrett said. “It’s actually illegal to charge upfront for a federal student loan reduction service or student loan debt reduction service.”
Biden advocated writing off student debt.
If you think you are being targeted, the Better Business Bureau offers an interactive scam tracking tool at BBB.org/ConTracker…
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