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Paying off student loan debt takes time. That’s why getting a call from someone who says they can help you get your loans forgiven now (for a fee) might sound appealing. Is it really relief or just a scam?

It’s illegal for anyone to charge fees before they help you or to pretend they’re affiliated with the Department of Education. For example, the FTC settled a case against Panda Benefit Services (also doing business as Prosperity Benefit Services) and its affiliated companies and operators for allegedly using these tactics to trick consumers into paying hundreds to thousands of dollars in illegal upfront fees — to the tune of more than $16.7 million. The FTC charged that instead of helping people manage their student loan debts, the defendants pocketed the money and left people deeper in debt. Thanks to the FTC’s action, these companies are now banned from the debt relief industry.

To get real help with federal student loan repayment, always start at StudentAid.gov and remember:

  • Don’t pay upfront for student loan debt relief. It’s illegal for companies to charge you before they help. Only scammers will do that.
  • Don’t share personal or financial information, like your Federal Student Aid ID number. The Department of Education won’t ask you for that information, but a scammer would. They might use that information to get into your account and steal your identity.
  • Don’t rush. Scammers say you need to act fast or risk missing qualifying repayment plans, loan consolidation, or loan forgiveness programs. But check it out before you sign anything.

Report student loan debt relief scams to the FTC at ReportFraud.ftc.gov and tell your state attorney general, too. Learn more at ftc.gov/StudentLoans.

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