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A lot of us have student loans – and some of us have trouble paying them every month. Some companies claim to resolve that issue by saying they can help you pay them down quicker, cheaper or get them forgiven altogether. Be cautious – some of these companies are running scams.

Here are some tips to avoid student loan repayment scams:

  • Never pay an upfront fee. It’s illegal for companies to charge you in advance before helping you to reduce or get rid of your student loan debt.  Companies that make you pay upfront might give you no help and not give your money back.  
  • Only scammers promise fast loan forgiveness. Before they know your situation, scammers might say they can quickly get rid of your loans through a loan forgiveness program. But they can’t.
  • A Department of Education seal doesn’t mean it’s legit. Scammers use official-looking names and logos and say they have special access to certain federal programs. They don’t.
  • Don’t share your Federal Student Aid (FSA) ID with anyone. Scammers could use it to take control of your personal financial aid information on U.S. Department of Education websites.

Last month, the FTC announced a lawsuit against American Financial Benefits Center (AFBC), Financial Education Benefits Center (FEBC), AmeriTech Financial, and Brandon Demond Frere as part of its crackdown against unlawful student loan debt relief practices, Operation Game of Loans. The FTC alleges that the companies charged illegal, upfront fees and failed to deliver on their promises to enroll people into a government program that they claimed would permanently lower monthly loan payments or result in total loan forgiveness.

The FTC also alleges the companies charged a monthly fee for the life of the loan (typically 10-25 years) and represented that the fee would go towards the student loan balance. But it didn’t.

You don’t have to pay for help with your student loans. There’s nothing a company can do for you that you cannot do yourself for free: federal borrowers can start with StudentAid.gov/repay; private borrowers can start by talking with their loan servicer.

Spotted a scam? Let us know about it.

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Student Loan and Education Scams
JDBaby
July 20, 2021
I don't really want to write a blog I just want to stop the phone calls this one person had the audacity to tell me if I asked politely he'd consider removing my phone number (REALLY)
K
August 13, 2021
I get daily calls from "Charlotte" from "Student Services" saying that I am eligible for loan forgiveness. She calls from a different number every day. Real legit {insert eye roll here}. 301-238-7750 838-282-7245 909-219-8282 314-530-2366 575-205-0142
SCAMBUSTER
August 19, 2021
PHONE SCAM CLAIMING MY LOAN FORGIVNESS APPLICATION DEADLINE IS APPROACHING. "MARISA MARTIN" THEY WANT YOU TO CALL 949-593-3066 CALL FROM 513-443-9981
Regular receiv…
September 02, 2021
Received a call from a hidden number that I did not pick up. They left a voicemail under the number +1 712-864-8015 "Hi it's Valerie, my agent number ID is 3927 and I'm just calling to let you know your student aid has qualified for the forgiveness program. We may be able to grant you a partial of full forgiveness package but um just so you know this program has limited opening and is on a first come first server basis so call back soon to finalize the details. and my number is 888-575-1880 you can talk to me or any other reps. to finalize your file, thank you."
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