With President Biden’s announcement on widespread student loan forgiveness, many borrowers are eager to get that debt relief applied to their balance as soon as possible. But there’s still some confusion around who will qualify, for how much, and how to actually get the debt relief you do qualify for. This confusion is a magnet for scammers seeking to exploit the recent news to manipulate people into sending money or giving up sensitive information.
Here’s how to detect common red flags of student loan forgiveness scams as well as some information on key deadlines and criteria you need to know to actually get your student loan debt forgiven.
How to Avoid Getting Student Loan Forgiveness Scams
Any Phone Call, Email, or Text About Debt Forgiveness Is a Scam
The Department of Education (DOE) is still in the process of implementing the wide-scale student loan forgiveness plan. It has not reached the stage of contacting borrowers yet. When it does reach that stage, you will more likely than not receive messages directly to your student loan service account, not to your email or phone.
Even if you do receive an email or call that sounds legitimate, don’t click through any links or give out any personal information. Instead, hang up and log in to your student loan account directly.
If you’re uncertain about how legitimate a call is, tell them you’re busy and will call back later. Hang up and find your student loan servicer’s customer service number on their website. Call that number.
If it was a legitimate call, the customer service representative can help you take any actions required. If it wasn’t, you can report the scam call to them so they can potentially alert other borrowers.
Any Phone Call, Email, or Text About CARES Act Forbearance or Repayment Plans May Also Be a Scam
Your loan servicer will not contact you to ask you to enroll in forbearance, deferments, income-driven repayments, or any other repayment or deferment plans. You also do not have to pay any fees to file paperwork for any of these.
If you want to enroll in any of these programs, contact your loan servicer directly. Don’t click through links in any emails (even if the email looks legitimate). Do not give out any sensitive information to anyone who called you. Always hang up and call the customer service number found on your loan servicer’s website — not a phone number given to you over the phone, in an email, or in a letter.
Any Service Charging a Fee to Help You Apply for Forgiveness Is a Scam
The DOE will not require borrowers to pay any fees of any kind at any stage of the process to qualify for student loan forgiveness. It is a free program. While some borrowers may need to fill out an application, that application will come through your student loan servicer or the DOE’s financial aid website.
Some of these scam services are claiming to charge a fee in exchange for “speeding up” the process to get you your forgiveness faster. This is not real. Any call, email, or text asking for money is a scam. Ignore it and report it to the FTC (Federal Trade Commission).
Watch Out for Imitations of the Department of Education, Loan Servicers, or Other Official Agencies
Scammers can copy and paste logos, names, and other details that make an email or letter look official even though it isn’t. Any time you are asked to provide sensitive personal information, pay money, or otherwise take action on your account, hang up (or close the email) and contact your loan servicer directly. If it is a legitimate request or document, you will be able to take care of it that way.
Don’t Respond to Threatening or Scary Notices
Some scams involve tricking you into believing your loan might become delinquent or go into default. The scammer will often request payments or personal information to “help you” prevent that from happening.
If your account is in danger of becoming delinquent, contact your loan servicer directly to find out if any actions are needed on your part. These threats can be scary but there is no situation, no matter how urgent, where contacting your loan servicer directly isn’t an option.
If a caller is pressuring you to stay on the line, that’s a major red flag that this is a scam. If a threatening email or letter requests that you contact a certain number or email, check your loan servicer’s website to verify that contact information.
Be Wary of “Time Sensitive” Requests
Firstly, the application that some borrowers might need to fill out won’t be available until early October. So any “time sensitive” requests right now are likely scams. This is even more true given the fact that borrowers will have until the end of next year to submit that application for forgiveness.
If a caller is trying to rush you into a decision in any way, it is almost definitely a scam. Hang up immediately. Contact your loan servicer directly if you’re feeling unsure.
Refunds on Payments Made During the Pause Are Real, but Be Wary of Scams
If you made any payments after March 13, 2020, when the pause went into effect, you can request a full refund.
The “up to” in the “up to $20,000” means that balances below that amount will get cleared but you won’t get a check for the remainder. For example, if you currently owe $15,000 and qualify for $20,000 in relief, you will get your $15,000 cleared. You won’t get the remaining $5,000 you qualify for as a refund.
While it’s worth getting them refunded if the debt relief is enough to wipe out your balance, you might want to leave those payments alone if you will still owe a balance after the $10,000 or $20,000 is forgiven.
Either way, be wary of scams. No one is going to contact you to offer you this refund. There are no fees to get the refund. There are no fees to keep your payments suspended during the pause.
The only way to get the refund is to call your loan servicer directly and make the request.
Public Service Loan Forgiveness (PSLF) Is Time-Sensitive, Here’s How To Get It
The PSLF program, which forgives all federal student loan debt for those who qualify, has temporary, time-limited new rules that would let more borrowers qualify who would not have qualified under the original terms.
Check the DOE’s website to find out if you qualify under the new terms of the PSLF limited waiver. If you think you do, you need to apply by October 31.
How to Get Federal Student Loan Debt Forgiveness
Everything the public knows about the Biden-Harris Administration’s student debt relief plan can be found on the DOE’s student aid website here.
Here’s a short summary of the key dates and details from that page you might be wondering about:
- If you meet the criteria and the DOE already has your income information, your loan forgiveness will be automatic. You won’t need to do anything.
- If the DOE does not have the relevant income data already, you will need to fill out a short application verifying your income. This application will be available by early October.
- Once the DOE has your income data, you can expect to see the debt relief within 4-6 weeks.
- You have until December 31, 2023 to submit the application.
- If you still have a balance owed after debt relief, payments will resume, without exception, in January 2023.
- To make sure your application is processed before payments resume in January 2023, submit it by November 15.
- Only your federal loans will qualify for forgiveness. Private loans, such as those from Sallie Mae or Ascent, are excluded. Federal loans that you have since refinanced into a private loan will also be excluded. However, federal loans serviced by a private loan servicer still qualify.
The criteria for debt relief are as follows:
- Individuals earning less than $125,000 ($250,000 for married couples filing jointly) will get up to $10,000 in relief. This will be based on your adjusted gross income (AGI) from your 2020 or 2021 tax return (the amount shown on line 11 on Form 1040).
- Individuals who meet those income requirements and received a Pell Grant at any point, for any amount while in college will get up to $20,000 in relief.