Protecting Yourself from Scams

Some scammers target student loan borrowers, promising that they can reduce or eliminate student loan debt.   

These companies usually charge hundreds of dollars for their services.  However, the debt relief programs used by the companies, such as loan consolidation and income-based repayment plans, are available to borrowers FOR FREE.  For more information, information on Repayment Options, and Loan Consolidation Information.

Even worse, some companies charge steep fees but fail to deliver on their promises to enroll borrowers in a debt relief program.

Warning signs: How to Tell if a Debt Relief Company is a Scam

A debt relief company may be a scam if it:

  • Promises immediate loan forgiveness or debt cancellation;
  • Charges you fees before it actually does anything for you;
  • Pressures you to sign a contract on the spot;
  • Requires you to finance your fees through another company;
  • Charges recurring monthly fees;
  • Offers to contact your creditor to obtain a “special deal” in connection with a federal loan (debt relief companies do not have the ability to negotiate a “special deal” for federal loan repayment; repayment levels are set by law);
  • Pressures you to sign a “third party authorization” or “power of attorney”
  • Requests your Federal Student Aid PIN;
  • Uses a name or logo that makes it seem as though the company is a government agency or is associated with a government agency; or
  • Tells you it is working with the federal government or a loan servicer.  (No company working with the government or a loan servicer would charge you money to consolidate loans or to enroll in an alternative repayment plan.)
  • If you think you have been the victim of a student loan scammer, you can file a complaint with our office or call 1-800-771-7755.