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Millions of Americans may be eligible for up to $10,000 in federal loan forgiveness (and up to $20,000 if they received Pell Grants) thanks to an announcement from President Joe Biden last week. This news has been a cause for celebration for some and anger for others, as most major political moves are, but it’s also creating a setting that is absolutely perfect for scammers. Here’s how to avoid any loan-forgiveness-related scams.
Know exactly how to get your forgiveness if you qualify
The first step in avoiding scams is knowing if you’re even eligible for the student loan forgiveness. Under the Biden administration’s plan, individual loan borrowers making up to $125,000 annually and married couples or heads-of-household making up to $250,000 may be eligible for up to $10,000 of forgiveness. If you got a Pell Grant and your income falls under those guidelines, you may be eligible for $20,000 in forgiveness. If you’re a student right now and your parents still claim you as a dependent, your forgiveness is based on their income.
For about 8 million people, the forgiveness will be automatic because the Department of Education already has their info. For everyone else, the DOE is working on an application that can be filled out. Sign up for alerts from the DOE on the department’s website so you’ll know right away when that application opens.
To that end, be wary of any and all emails you receive about student loans. Check to be sure they’re from genuine government agencies and be cautious about entering any personal information into a website you don’t absolutely trust.
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Avoid the scams
The Better Business Bureau and the DOE have both made it clear that scams in the student loan world are abundant, and the BBB is being proactive about warning against any new ones that this new forgiveness program may incentivize. The BBB suggests these methods for avoiding scams:
Know the terms of your loan and the relief program, as outlined above.Go directly to government websites and only use those.Never pay money for a free government program. If you’re being told you can get more benefits or faster benefits for a fee, you’re being scammed. Be on alert for any out-of-the-blue calls, emails, or text messages claiming to be from the government, as real government agencies only contact you that way with permission.Double-check websites to avoid fake agencies and programs. Scammers can make look-alike government websites, so be on the lookout for real ones with .gov addresses. If you are suspicious of anything, reach out to the government agency directly for verification and, if your suspicions were correct, report the scammer you encountered. Fact-check everything, even if you’re getting your info from a trusted friend, as their social media may have been hacked or they may have fallen victim to a scam themselves.
