President Joe Biden (Photo by Brook Christopher/WireImage)
President Joe Biden hasn’t cancelled your student loans, but don’t pay for student loan forgiveness.
Here’s what you need to know — and what it means for your student loans.
Student Loans
If you follow the latest headlines on student loans, Biden has yet to enact wide-scale student loan cancellation. Despite pressure from Sen. Elizabeth Warren (D-MA) and Senate Majority Leader Chuck Schumer (D-NY) to cancel up to $50,000 of student loans, Biden has opted to focus on targeted student loan cancellation. Since becoming president, Biden has cancelled more student loans than any president. This includes $10 billion of student loan cancellation, including $1.5 billion of student loan cancelled this way and billions of dollars of student loans cancelled for student loan borrowers with a total and permanent disability. (Find out here how to apply for student loan forgiveness). Without wide-scale student loan forgiveness, you may be askingL “Should I stop paying my student loans?” If you didn’t get student loan forgiveness, you also may want to pay a company to help you with student loan forgiveness. The lack of wide-scale student loan cancellation has resulted in potential scams involving student loans. Here’s what you need to know so you don’t lose money:
1. There’s no Biden student loan forgiveness
If someone promises you “Biden student loan forgiveness,” it’s a scam. Biden student loan forgiveness refers to student loan forgiveness through the U.S. Department of Education for your federal student loans. Biden student loan forgiveness also refers to student loan cancellation enacted by Biden under existing law. Again, “Biden student loan forgiveness” refers to federal student loan forgiveness through the federal government. No company can forgive your student loans. A typical scam is for a company — usually through an email or ad — that promises to cancel your student loans through the Biden student loan forgiveness program. Here’s the thing: there is no Biden student loan forgiveness. This scam sounds like the Public Service Loan Forgiveness program, which Congress created and President George W. Bush, not Biden, signed into law in 2007.
2. Don’t pay for student loan forgiveness
If a company wants to charge you a fee to cancel your student loans, it’s a scam. Don’t ever pay a company an upfront fee to forgive your student loans or give you student loan cancellation. This simply doesn’t exist. Student loan forgiveness is free. There are no fees for income-driven repayment plans. There are no fees for Public Service Loan Forgiveness. There are no fees for Teacher Loan Forgiveness. All of these programs are available at no cost to you through the federal government. Contact your student loan servicer for more details.
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3. Student loan forgiveness: Don’t hire a company that’s affiliated with the U.S. Department of Education
When it comes to student loan forgiveness, don’t hire a company who claims they are affiliated with the U.S. Department of Education. This simply doesn’t exist. The U.S. Department of Education cancel student loans directly. The Education Department doesn’t contract with third party companies to cancel your student loans. If a company claims a special relationship with the Education Department, don’t work with them. Again, you can get student loan forgiveness for free through the U.S. Department of Education completely.
4. Student loan cancellation: Don’t hire someone to negotiate your student loans
5. Student loan forgiveness isn’t expiring
Student loans: what to do if you get scammed
If you get tricked by a company promising student loan forgiveness, make sure to contact your bank immediately. If you enrolled in automatic payments to pay this company, turn off autopay. Also, you can file a complaint with:
- the Consumer Financial Protection Bureau (CFPB)
- your state attorney general
- U.S. Department of Education
- the Federal Trade Commission (FTC)
- Better Business Bureau
There are many options for student loan relief. Make sure you understand all your options. Here are some popular ways to save money:
