This week, we looked at the rise of student loan scams and what the Biden administration is doing about it. Plus a look at a new type of school on the Standing Rock reservation.
Happy Monday,
Have you or someone you know revived a suspicious call or voicemail about student loans lately? Scams have been rampant since President Biden announced his plan for federal student loan forgiveness.
This week, student loan scams got the attention of the White House. They’re upping efforts to crack down on the scammers.
First, they're focusing on holding scammers accountable. To do that the White House says it's going to increase communication between the Department of Education and other key federal agencies like the Federal Trade Commission.
The government is also going to send reports about borrower complaints to states – so they can act faster to stop scams.
"It's an all-government approach, because what we know is it's already happening, that there are evil people who will be trying to use a program like this, that's trying to help people, and run their own frauds and scams to somehow get money or personal information about people," says Richard Cordray, the chief operating officer of Federal Student Aid, a branch of the Education Department.
The White House also released a "Do's and Don'ts" tip sheet. Among the tips included:
Don't pay anyone who promises loan forgiveness. The application will be free. Don't give anyone personal account information for the Federal Student Aid website. The Education Department and federal student loan servicers will not call or email asking for that information. Don't give personal or financial information over the phone to a caller that's unfamiliar. When in doubt, borrowers should hang up and call their loan servicer directly.
Of course one thing that would be really help amid all this confusion is for the Education Department to release more clear guidance about their forgiveness application.
I put this question to Cordray this week. He said they’re working at “warp speed” to get a clear and easy application out.
But they still have not released any more concrete details on when exactly that will be.
Betsy Mayotte, the president of the Institute of Student Loan Advisors, a nonprofit that offers free counseling to borrowers told me that releasing the application might not actually be all that helpful in preventing bad actors.
"In one way, it'll help," she says. "But if I know the scammers, they'll use that as an opportunity too: 'The application's out. You have to hurry. Time is short. Now that the applications are out, let us help you to make sure you don't miss it.' So it's a catch-22."
Senators are urging the Education Department to make informal removals of students with disabilities from school a prohibited form of discrimination, a day after an AP story documented the practice’s impact on families and children. Read the investigation here.
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