FACT SHEET: Biden-⁠Harris Administration Boosts Administration-Wide Efforts to Protect Student Loan Borrowers from Scammers

The Biden-Harris Administration student debt relief initiative could benefit as many as 40 million Americans. Today, the White House announced ongoing and expanded efforts across the Administration to combat scams and misinformation, including educating borrowers about how to protect themselves against scams and accelerating efforts to share scam complaints with states. 

One of the most critical ways to prevent scams and protect borrowers from being taken advantage of is developing a clear, simple, and secure site for borrowers to apply for debt relief and have the most up to date information from trusted sources, such as the Department of Education, Federal Student Aid, and other Administration agencies. In addition to this work, the Federal Trade Commission (FTC) and Consumer Financial Protection Bureau (CFPB) have committed to working together to hold scammers accountable if they take advantage of borrowers. This commitment builds upon their recent work to take action against student loan scammers. Over the course of the last 18 months, the FTC has reached nearly $30 million in settlements that included refunds for tens of thousands of student borrowers who were illegally charged up front fees and falsely promised reduced or eliminated student loan payments. Earlier this year, the FTC won a $7.5 million judgment against Arete Financial Group and permanently banned the company from the student loan business for illegal up front and monthly fees. The CFPB has similarly taken action against multiple entities and individuals since the beginning of 2021, including by requiring refunds of nearly $8.7 million to consumers and banning several individuals from the debt-relief payment processing industry for assisting at least 30 student loan debt relief schemes that affected approximately 270,000 borrowers.

In addition to developing a clear, simple, and secure site for borrowers to apply for debt relief, the Biden-Harris Administration’s ongoing and expanded scam prevention and enforcement actions include:

• Releasing Student Debt Relief “Do’s and Don’ts” to help borrowers avoid scams. ED is releasing a list of simple actions that borrowers should and should not take as the Administration prepares to release the student debt relief application this month. The Administration will share these Do’s and Don’ts through multiple communication channels in multiple languages, and will work with stakeholders to ensure the list of actions reach borrowers across the country. This week, ED will communicate directly with millions of people who signed up to receive more information about the student debt relief program specifically about how to watch out for and avoid scams.

• Taking New Action to Go After Scammers in States. Starting this month, ED will regularly provide complaint reports to states that identify scams operating in their jurisdictions. Sharing will enhance the ability for State attorneys general to act quickly by sending cease and desist letters to scammers targeting borrowers in their states.
  
  
• Working Across the Federal Government and with the States to Combat Scams. The White House will lead an all-of-government scam prevention effort, coordinating across ED, FTC, CFPB, ED’s Office of Inspector General (OIG), State banking regulators, licensing bodies, student loan ombudsmen, Secretaries of State, and State attorneys general. ED, CFPB, and FTC will work collaboratively to analyze trends in scam complaints in real-time, sharing this information with states to combat scams, communicate with servicers that states license or regulate about how to spot and prevent scams, and field borrower questions, concerns, and complaints. Student loan complaints are shared across federal and state agencies using the FTC’s Consumer Sentinel Network, which connects nearly 3,000 federal, state, local, and international law enforcement users. The Consumer Sentinel Network allows enforcement agencies to be updated in real time when new complaints on a specific topic or a specific entity are filed and enables enforcement agencies to coordinate and act when they see surges in complaints. 

• Launching Outreach and Education Campaigns to Equip Borrowers with Accurate and Actionable Information. The Administration will launch coordinated outreach and education campaigns to provide accurate information to borrowers to help them avoid getting scammed. This week, as part of this effort, the FTC posted a blog and launched a social media campaign to provide borrowers with vital information about how to avoid scams involving the debt relief application, which will be launched later this month. As part of the Administration’s scam-prevention efforts, CFPB will amplify its scam-prevention resources, along with what consumers can do if they suspect they’ve already fallen victim to a scammer. ED will also publicly release details on what the official application form will look like and what is expected of borrowers, reducing scammers’ ability to claim they will help borrowers access relief and allowing borrowers to spot false applications.

• Leveraging Social Media to Reach Borrowers. The Biden-Harris Administration will communicate about the threat scammers pose by using channels that reach borrowers where they are. As the application for student debt relief becomes available, the White House will engage directly with digital creators and influencers on social media platforms to help spread accurate information about the program and alerts concerning potential scams.

Coinciding with the launch of the Administration’s whole-of-government effort, the White House on Friday will convene senior leaders from ED, the FTC, the CFPB, and the Federal Communications Commission to discuss the agencies’ plans for aggressive and comprehensive scam prevention and enforcement strategies. The Administration is encouraging any individuals who have been contacted by scammers to report them to the FTC at reportfraud.ftc.gov.

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