Staff Reports
The Federal Trade Commission is sounding the alarm about sneaky scammers targeting folks with false hopes of zapping their student loans, and critics are pointing the finger at President Joe Biden for igniting the whole mess.
Biden has been promising to erase student loan debt since he started his run for prez in 2020, and he’s been tossing out a bunch of plans and proposals to make it happen. While his moves have affected about 4.3 million out of the 44 million people with student debt, his big talk has set the stage for scammers to swoop in like vultures.
Biden student loan forgiveness promises coincide with rise in scams – Washington Examiner https://t.co/RTyGMLEgQL
— Melanie (@MellieMAGA) April 23, 2024
The FTC put out a warning on April 16, saying, “Heard a lot about federal student loan forgiveness lately? Scammers have, too. You might get a call from someone saying they’re from Federal Student Aid or the Department of Education. They’re lying.”
Virginia Foxx, who leads the House Education and the Workforce Committee, is wagging her finger at Biden, saying he’s partly to blame for all this mess.
“The president keeps pushing his ‘free college’ plan, and it’s making it easier for scammers to cheat Americans. It’s a fact,” Foxx said. “He’s not only responsible for this mess, but also for sticking taxpayers with the bill every time he rolls out a new version of his scheme.”
Oh, and surprise, surprise, the White House didn’t have anything to say in response to all this. Shocker.
Biden first tossed out the idea of axing at least $10,000 per person in student debt before the 2020 election. His first try at that would’ve ditched up to $20,000 per borrower, costing Uncle Sam at least $400 billion. But the Supreme Court nixed that plan last summer.
Since then, the president has gone on a spree of wiping out loans, racking up over $150 billion for just over 4 million borrowers. And if they don’t pay up, that bill goes right on the public’s tab.
Biden and the Education Department have also cooked up the “Saving on a Valuable Education,” or SAVE, Plan to slash what future borrowers have to cough up. But a bunch of states are saying it’s illegal in two separate lawsuits, and the plan could cost $475 billion over a decade, according to the Penn Wharton Budget Model.
Biden has been yapping about how thousands of folks per month are eligible to get their debt forgiven, about 25,000 each month. But not all of the letters offering loan forgiveness are from the president himself.
One common scam uses a phony group calling itself the “Student-Loan Debt Department,” sending out emails with a phony case number and phone number. It’s all a sham.
The FTC has some tips on how to avoid getting duped, like never paying upfront fees, sharing login info, or buying into promises of special access to forgiveness programs. And in March, the agency handed out $4.1 million in reimbursements to nearly 28,000 people who got scammed.
But according to Andrew Gillen, who looks into education policy at the CATO Institute, Biden’s pledges and pile of programs have created a perfect breeding ground for fraud.
“If someone offered to pay off my mortgage out of the blue, I’d know it’s a scam,” Gillen said. “But if the president has been hyping mortgage forgiveness plans for years, I’d be way more likely to fall for it.”
So, it looks like the president’s ambitious promises and tangle of programs have made it all too easy for the scammers to swoop in and take advantage of unsuspecting borrowers. And maybe, just maybe, that’s a lesson for Uncle Joe to learn.
