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Biden’s Plan for Student Loans Attracts Lawsuits, Scams and Confusion

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Scott Buchanan, the chief director of the Student Loan Servicing Alliance, a trade group representing loan servicers, said that because the program was announced, it has not been unusual for call centers to start the day with at the very least 2,000 people waiting to talk to someone who may need more information. There’s little for servicers to do, he said, but encourage callers to join Department of Education email updates.

As borrowers wait, debt forgiveness activists and loan servicers say misinformation is mushrooming and scammers are proliferating.

The Department of Education warned about fraud in its email promising weekly updates. “You could be contacted by an organization saying they are going to enable you get loan discharge, forgiveness, cancellation, or debt relief for a fee,” the message said. “You never should pay for help along with your federal student aid.”

Administration officials say they’re in regular contact with the Consumer Financial Protection Bureau and the Federal Trade Commission to debate ways to remain ahead of scammers, and that the F.T.C. has issued alerts to borrowers.

Borrowers are attempting to assist one another on TikTok and Facebook. Lots of have contributed recordings of shady voice mail messages, encouraging others not to reply suspicious calls. Private Facebook groups where people share stories and solicit advice have drawn curious users.

Debby Carter, an artist who lives in St. Petersburg, Fla., said she received a voice mail message inside hours of Mr. Biden’s announcement. Ms. Carter, 65, said she had gone back to high school in her 50s and has about $60,000 in federal loans.

“This can be a message from the Florida student loan center positioned in Tampa,” a person’s voice said. “Our records indicate you’re eligible for a $10,000 removal in your account. Please give our Tampa office a call.”

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