President Joe Biden hasn’t cancelled your student loans, but don’t pay for student loan forgiveness.
Here’s what you need to know — and what it means for your student loans.
If you follow the latest headlines on student loans, you know that Biden hasn’t enacted wide-scale student loan cancellation. Despite pressure from Sen. Elizabeth Warren (D-MA) and Senate Majority Leader Chuck Schumer (D-NY) to cancel up to $50,000 of student loans, Biden has opted to focus on targeted student loan cancellation. Since becoming president, Biden has cancelled more student loans than any president. This includes $10 billion of student loan cancellation, including $1.5 billion of student loan cancelled this way and $5.8 billion of student loans cancelled for student loan borrowers with a total and permanent disability. (Find out here how to apply for student loan forgiveness). Without wide-scale student loan forgiveness, you may be asking: “Should you stop paying your student loans?” If you didn’t get student loan forgiveness, you may be tempted to pay a company to help you with student loan forgiveness. Why? The lack of wide-scale student loan cancellation has resulted in some student loan borrowers becoming victims of potential scams involving student loans. Here’s what you need to know so you don’t lose money:
1. There’s no Biden student loan forgiveness
If someone promises you “Biden student loan forgiveness,” it’s a scam. The term “Biden student loan forgiveness” refers to student loan forgiveness through the U.S. Department of Education for your federal student loans. Biden student loan forgiveness also refers to student loan cancellation enacted by Biden under existing law. Therefore, “Biden student loan forgiveness” refers to federal student loan forgiveness through the federal government. No company can forgive your student loans. Don’t believe any company that promises student loan forgiveness. (However, here’s how to get student loan forgiveness). A typical scam is for a company — usually through an email or ad — that promises to cancel your student loans through the Biden student loan forgiveness program. Here’s the thing: there is no Biden student loan forgiveness through a company. This scam sounds like the Public Service Loan Forgiveness program, which Congress created and President George W. Bush, not Biden, signed into law in 2007. However, only the U.S. Department of Education can cancel your student loans through the Public Service Loan Forgiveness program, not a private company. (Biden student loan forgiveness means 3 things for your student loans).
2. Don’t pay for student loan forgiveness
Don’t pay for student loan forgiveness. If a company wants to charge you a fee to cancel your student loans, it’s a scam. Don’t ever pay a company an upfront fee to forgive your student loans or give you student loan cancellation. This simply doesn’t exist. Student loan forgiveness is free. There are no fees for income-driven repayment plans. There are no fees for Public Service Loan Forgiveness. There are no fees for Teacher Loan Forgiveness. All of these programs are available at no cost to you through the federal government. Contact your student loan servicer for more details.
3. Student loan forgiveness: Don’t hire a company that’s affiliated with the U.S. Department of Education
When it comes to student loan forgiveness, don’t hire a company who claims they are affiliated with the U.S. Department of Education. This simply doesn’t exist. The U.S. Department of Education cancel student loans directly. The Education Department doesn’t contract with third party companies to cancel your student loans. If a company claims a special relationship with the Education Department, don’t work with them. Again, you can get student loan forgiveness for free through the U.S. Department of Education completely. (If Biden doesn’t cancel your student loans, do these 3 things).
4. Student loan cancellation: Don’t hire someone to negotiate your student loans
Student loan cancellation can’t be negotiated. If someone claims they can negotiate your student loans for you, they can’t. Unlike a garage sale, student loans can’t be negotiated. The U.S. Department of Education doesn’t simply negotiate your student loan balance because you hired a “negotiator.” Any company that claims they can lower your student loan balance is misleading you. Don’t pay to negotiate your student loans.
5. Student loan forgiveness isn’t expiring
Student loan relief is here to stay. Yes, temporary student loan forbearance is expiring January 31, 2022. However, student loan forgiveness and student loan cancellation are here to stay. Student loan forgiveness isn’t expiring. Don’t believe a company that tell you to “act now” or that student loan forgiveness is only available for a “limited time.” Student loan forgiveness is not a holiday sale. Student loan forgiveness, income-driven repayment plans and student loan consolidation will continue to be available. The U.S. Department of Education has been soliciting public comments and holding hearing to improve student loan forgiveness and student loan repayment. While Biden may simplify student loan forgiveness, student loan forgiveness isn’t expiring. Fortunately, you have time for student loan forgiveness, so don’t let a company make you think otherwise. (Here are 17 ways for Biden to fix student loan forgiveness).
Student loans: what to do if you get scammed
If you get tricked by a company promising student loan forgiveness, make sure to contact your bank immediately. If you enrolled in automatic payments to pay this company, turn off autopay. Also, you can file a complaint with:
There are many options for student loan relief. Make sure you understand all your options. Here are some popular ways to save money:
Student Loans: Related Reading
If Biden doesn’t cancel your student loans, do these 3 things
How to get student loan forgiveness
5 reasons why Biden hasn’t cancelled student loans
Here’s where Democrats stand on student loan cancellation