Scammers are using Biden's student-loan forgiveness as a 'cover for fraud' to get borrowers' personal information. The federal government is cracking down.

• The FCC ordered phone companies to stop carrying robocalls related to student-loan scams.
• It signaled out Urth Access, LLC, which was responsible for 40% of the robocalls in October.

President Joe Biden's student-loan forgiveness announcement was good news for millions of borrowers — and even better news for the scammers hoping to take advantage of the relief.them.

Last week, the Federal Communications Commission (FCC) announced it would be cracking down on a scam robocall campaign that used Biden's announcement of up to $20,000 in debt relief to get information from borrowers. The FCC identified Urth Access, LLC as the group responsible for generating upwards of 40% of student debt robocalls in October. The commission instructed voice service providers to stop accepting calls from that entity.

"Scam robocalls try to pull from the headlines to confuse consumers. The newest trick in their playbook? Trying to take advantage of people who want help paying off their student loans," FCC Chairwoman Jessica Rosenworcel said in a statement. "Today we're cutting these scammers off so they can't use efforts to provide student loan debt relief as cover for fraud."

According to the FCC press release, the spike in the robocalls in October can be connected to Biden's announcement of broad debt relief, just as similar spiked occurred following the Education Department's continued extension of the student-loan payment pause.

The calls included pre-recorded messages that offered borrowers help repaying their loans. A generic script of the call is typically as follows, per the FCC:

"Hello this is to inform you that the Student Loan payment suspension has been extended to December 31 of this year. Also, everyone is now going to get $10,000 dismissed upon income verification. If you do not verify your income, on January 1, your payments will start back up automatically. To receive the full dismissal, not just the $10,000 dismissal, a petition will be filed in your behalf so that your loan payments do not begin on January 1."

The call then instructed the borrower to dial a certain number depending on who their student-loan servicer is. The FCC told borrowers that they are likely talking to a scammer if the robocaller pressures them to provide money or information, says they need to pay a fee to apply for any form of debt relief, has a suspicious caller ID, or asks for bank account or credit card information. The real student-loan forgiveness application — which is currently not accepting any forms due to lawsuits — asked for basic information like name and Social Security number, not bank account information.

Before the student-debt relief application was officially launched in October, the White House and the Education Department released a number of ways it's planning to protect borrowers from getting scammed in the process. They included a "Do's and Don'ts" list to outline what actions borrowers should and shouldn't take when applying for relief, along with coordinating across agencies to identify scams in real time.

Amid the efforts to fight scams, the application for student-debt relief is closed due to two lawsuits that have so far blocked the implementation of the loan forgiveness. The Supreme Court agreed to hear both cases early next year and will determine whether Biden's plan is legal, or should permanently be blocked.