Scammers Rush In as Student Loan Forgiveness Stalls
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Here's your Money Briefing for Monday, November 21st. I'm Daniela Cheslow for The Wall Street Journal, in for J.R.
What is the current legal status of Biden’s student loan forgiveness plan?
Whelan. Remember President Biden's plan to erase up to $20,000 in student loan debt? That program is in limbo, while courts consider legal challenges to it. In the meantime, scammers are taking aim at confused borrowers.
So they'll get you on the phone and they'll say, okay, great. We just have to put in a few numbers for you. What's your FSA ID? What's your name? What's your address? What's your social security number? What's your date of birth? Trying to get you to share personal information that they can then use for nefarious purposes.
Today, we'll talk to Wall Street Journal personal finance reporter Julia Carpenter about the scams targeting student loan borrowers and what people can do to avoid them. That's all coming up after this little break.
This podcast is brought to you by ReliaQuest. Cyber criminals are constantly attacking. They want your data. They want your identity. They want your innovation. ReliaQuest fortifies your business with agentic defense, AI that detects, contains, and eliminates cyber threats in minutes. That's R-E-L-I-A-Q-U-E-S-T dot com.
If you hold student debt, you know. The White House plan to cancel up to $20,000 in student loans is tied up in the courts after a federal judge ruled it was unconstitutional. So borrowers will have to wait to see if they'll get some relief. But one group is not waiting, fraudsters. The Wall Street Journal's Julia Carpenter has been looking into how scammers are trying to cash in on the legal limbo. Hi, Julia. Hi, thanks for having me. Thank you so much for being here. Let's start first of all, where does the student loan plan stand at the moment?
You know, I think a lot of people have that same question.
How are scammers exploiting confusion about student loan relief?
People have applied. People expected to see it by some point in the future. Now all we know for sure is that payments are set to resume January 1st.
So people who thought maybe they'd get a break, that's not happening.
And I think for many people, they haven't been paying their loan balance now or their minimum payments now for almost two years since the pause went into effect. So January 1st is a really scary time for them.
Okay. How are scammers trying to poke at this confusion? What are you hearing?
I talked to the Federal Trade Commission, and they've seen complaints related to student loans skyrocket. They said that they've received 76,000 complaints of scams related to student loans, and that's just through the end of October 2022. So that's 76,000 complaints so far this year. Last year, they received... fewer than 50,000 complaints. So we're already seeing a lot of scams related to this. Tell me about some of these scams. So I spoke with one woman, her name's Samantha, and she'd received a call from an unknown number. And when she looked at the voicemail transcript, it was from a woman named Emma.
What kinds of scam pitches are borrowers receiving by phone and voicemail?
And this woman was... asking her to call back saying, oh, it's urgent. We have information to finally enroll you in student debt forgiveness. So a very attractive pitch. Samantha knew this was off from the jump because she paid off her student loans years ago. But when you listen to the phone transcription, it's very compelling. They're using a lot of the language that you see in the headlines. They're saying things are urgent. You need to call me back to complete your application. It's a really compelling pitch and Even though Samantha didn't fall for it, some people are.
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Chapters
5 chapters
1
What is the main topic discussed in this episode?
0:00–0:41
2
What is the current legal status of Biden’s student loan forgiveness plan?
0:41–2:41
3
How are scammers exploiting confusion about student loan relief?
2:41–3:45
4
What kinds of scam pitches are borrowers receiving by phone and voicemail?
3:45–4:29
5
What personal information do fraudsters try to collect from borrowers?
4:29–7:15
Speakers
2 identifiedMore from WSJ Your Money Briefing
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