Governor Kathy Hochul today issued a warning to consumers about scammers taking advantage of the recent student debt relief plan to steal borrowers’ money and personal information. Scammers are creating a sense of urgency by impersonating government agencies and promising instant student loan relief. Borrowers are reminded that it is important to remain vigilant, well-informed and prepared for any scams related to this new relief plan. Yesterday, Governor Hochul signed legislation to expand and simplify access to the federal public service loan forgiveness program statewide. This new legislation defines what qualifies as full-time employment for purposes of PSLF access and allows public service employers to certify employment on behalf of workers, eliminating substantial barriers to application and access to the program.
“New Yorkers work hard for every dollar they earn, and the student loan forgiveness plan will be critical to helping ease mounting debt pressures.” Governor Hochul said. “Unfortunately, unscrupulous individuals and scammers are using this as an opportunity to take advantage of others. Today, we’re putting scammers on notice: We won’t let you take advantage of hard-working New Yorkers. I urge everyone to stay vigilant and stay informed to stop these bad actors in their tracks.”
What you need to know about the Federal Student Aid Plan:
On August 24, 2022, the Biden administration announced a three-part plan to help working and middle-class federal student loan borrowers. The plan includes:
- A final extension of the student loan repayment pause until December 31, 2022 and loan forgiveness of up to $20,000 for qualified individuals
- Improving the public service loan forgiveness program and creating a new income-driven repayment plan to reduce future monthly payments for low- and moderate-income borrowers.
- Lowering the cost of college to protect future students.
The US Department of Education is working quickly to implement improvements to student loans, but many details are yet to come. The Department of Education recommends logging into your StudentAid.gov account to make sure your contact information is up-to-date and to sign up for alerts when new information becomes available.
How to avoid student loan forgiveness scams:
- Look for reliable information and sources. Go only to “.gov” websites when looking for help. The US Department of Education recently launched a website to provide borrowers with a one-stop location for accurate and up-to-date information about the program. Upon entering the site, borrowers will find not only general information, but also a detailed Frequently Asked Questions section that provides facts about the student debt relief plan.
- Do not trust any person or program that promises you early or special access, or guaranteed eligibility. You may be contacted by a company saying it will help you get loan forgiveness, forgiveness, cancellation or debt relief for a fee. They can also help you apply early. The application for loan forgiveness will begin in early October and early access is not possible and you should never pay for aid with your federal student aid. If you receive any of these offers, it’s a scam.
- Do not give your personal information, Federal Student Aid ID, or Social Security number to anyone who contacts you. No one from the Department of Education will call or text you about this initiative. Be sure to work only with the US Department of Education and do not disclose your personal information or account password to anyone. Original emails to borrowers will only come from [email protected].
- If you come across a scam, report it. Contact the official Federal Student Aid website to file a complaint or contact the Federal Trade Commission. The US Department of Education provides additional tips and resources here.
Secretary of State Robert J. Rodriguez said, “As many New Yorkers struggle to repay their student loans, scammers are preying on these borrowers in desperate need of immediate student loan relief. The New York State Division of Consumer Protection is reminding borrowers to use only the government trustees and not respond to unsolicited offers of forgiveness, as student loan forgiveness scams have surfaced following the federal government’s recent forgiveness announcement.”
State Senator Kevin Thomas said, “It’s a shame that the excitement and demand for this long-awaited federal student debt relief has created a new window of opportunity for scammers to exploit those seeking help. government websites to access student debt relief information.”
Assemblyman Harvey Epstein said, “I urge New Yorkers to be on the lookout for scams related to student loan forgiveness. As we fight to make forgiveness available to more New Yorkers, we are unfortunately seeing scammers trying to take advantage of borrowers. The good news is that there are ways to protect yourself. I applaud Governor Hochul for making student loan forgiveness a priority and for protecting student borrowers from predatory scams.”
The New York State Division of Consumer Protection offers voluntary mediation between a consumer and a business when a consumer has been unsuccessful in reaching a resolution on their own. The Customer Helpline 1-800-697-1220 is available Monday through Friday from 8:30 a.m. to 4:30 p.m., excluding public holidays, and consumer complaints can be submitted anytime at https: //dos.ny.gov/consumer -protection.
For more consumer protection tips, follow the Division on social media on Twitter: @NYSConsumer and Facebook: www.facebook.com/nysconsumer.
