As of mid-2022, about 43 million people, including 8.9 million age 50 and older, had outstanding federal student loans, with the average debt burden topping $37,600, according to data from the U.S. Department of Education’s Federal Student Aid office (FSA).
At the same time, the student debt landscape is undergoing big changes. On Aug. 24, President Joe Biden announced a plan to forgive up to $20,000 in student debt for millions of borrowers. For those who still have outstanding loans, federal repayments are set to resume 60 days after June 30, 2023, after a pandemic moratorium. (The suspension could also end a bit earlier if litigation over student debt forgiveness has been settled.)
Circumstances like these can breed confusion and financial anxiety, a combination that gets high marks from scammers. They barrage borrowers with robocalls, emails, texts and social media messages touting sketchy strategies to quickly reduce monthly payments or procure loan forgiveness.
Some of these schemes involve sham debt relief companies of the kind that also target people in arrears on mortgages, credit cards or medical bills. Other scammers pose as student loan servicers or representatives of the U.S. Department of Education.
The common thread is that they will solicit an upfront payment or request personal information, like your FSA account credentials or Social Security number, supposedly to secure your freedom from student debt.
Dodgy debt relief companies
There are legitimate companies and organizations that can help you navigate the complexities of the student loan system — for example, by sifting through myriad federal and state repayment and forgiveness programs to see if you qualify. Their tips and tools may save you time and money.