Millions of Americans have accrued student loan debt in an attempt at a better life. Everywhere one looks, there are advertisements about student loan forgiveness. Sometimes, people even get cold calls claiming the recipient is eligible for student loan forgiveness, even if the recipient never went to college or accrued student loan debt.
Many of these calls are scams, according to Summer, a company geared toward helping student borrowers streamline their loans and save money in the end. The scams have really popped up since the pandemic.
“It’s kind of a prime moment for scams because I think they’re capitalizing on the confusion that surrounds what is happening with student loan policy and potential forgiveness,” said Bridget Haile, head of borrower success at Summer.
Other scams contact people and offer people other types of debt relief. With so many Americans still feeling the sting of the pandemic, they are hoping for any type of relief. Unfortunately, many of these so-called companies only want to pilfer information and money from the victims.
One might wonder what somebody could achieve by offering debt relief. Well, they could procure two things from the victim; information to steal their identity (social security, birthdate, and other identifying information), or they talk the victim into giving them access to their bank account to make “payments.”
Putting all the scams aside, President Joe Biden wants to sign a bill cancelling 11.5 billion dollars in student loans. The amount includes 5.8 billion in student loan cancellations for student borrowers with a total and permanent disability, 1.5 billion in loan forgiveness to student borrowers who were misled by their college and got student loan forgiveness through borrower defense repayment, and 4.5 billion in student loan forgiveness for student borrowers seeking public student loan forgiveness.
Even though there have been student loan forgiveness programs in the past, Biden made a few changes to the process. The changes impact which student loan payments should count, which types of student loans should count, which employer qualify, and when the student loan payments start counting toward student loan forgiveness.
Even though Biden has his pen poised and ready to sign on the dotted line, there are a few roadblocks in the path of the legislation. There is a debate on whether the president has the authority to cancel student loan debt.
There is also an argument on how much to cancel. Biden supports a wide-scale student loan forgiveness for up to $10,000. Sen. Elizabeth Warren (D-MA) and Senate Majority Leader Chuck Schumer (D-NY) want to cancel up to $50,000 of student loans.
Progressive Democrats have been lobbying the president to cancel everybody’s student loan debt up to $50,000, but Biden is not bending past his $10,000 ceiling. He also does not want to offer it to every student.
Biden is standing behind his decision to only offer it to a targeted audience. He is only wanting to cancel student loans for the groups listed earlier.
Forbes suggests to students who are not clumped in the targeted groups to do three things to alleviate their student loan debt. Look into refinancing the loan to get a lower interest rate and monthly payment, investigate income-driven payments, and sign up for public service loan forgiveness.