The Supreme Court overturned the Biden administration's student loan annulment scheme on Friday with a 6-3 decision. Loan payments are due to restart in October, while the Federal Trade Commission (FTC) issued a consumer alert cautioning borrowers to be on their guard against hoaxers who could misrepresent themselves as U.S. Department of Education staff and offer phony loan assistance. The FTC also offered advice to help borrowers keep safe.
Scammers may target student loan borrowers in the aftermath of the Supreme Court overturning the Biden administration's debt forgiveness plan on Friday and as loan repayment is due to restart in the fall, warned the Federal Trade Commission in a consumer alert issued Saturday.The FTC cautioned borrowers, saying "scammers often exploit uncertainty in situations like this" and that "people worried about paying back loans might be lured by offers to 'help.' Robocalls and text messages may come flooding in implying help with loan repayment."The Biden administration's forgiveness plan had the potential of erasing up to $20,000 of federal student loan debt for tens of millions of Americans, with an estimated 14 million individuals having their debts potentially fully erased. Now, those borrowers and others must prepare for loan payments to resume in October, following a period of over three years during which interest was not accrued.President Joe Biden said Friday that his administration will strive to find an alternative solution for delivering loan forgiveness after the Supreme Court's ruling. Moreover, when repayments begin again, there will be a 12-month window during which borrowers will not be subjected to the most severe consequences associated with missing payments, including default or blemishes on their credit report, Biden added.
Be aware of how to spot a student loan scam according to the FTC:1. Don't believe anyone who claims to offer debt relief or loan forgiveness, as they could be a scammer. Often times they have official-looking names, or seals and logos, but they have no special access to repayment plans or forgiveness options that do not exist. If you become tempted, take the time to review the options in your student loan account before proceeding.2. If someone asks for your Federal Student Aid ID, it is a scam as there is nothing anyone can do with your information that you cannot do yourself without cost.3. Never pay for help with student loans as you can get help for free at StudentAid.gov/repay or directly from your loan servicer if your loans are private.
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