Pennsylvania AARP

Scammers target student loan debt

Student loan debt is a bigger burden than ever, with more than 43 million people carrying outstanding federal student loans.

And while federal loan repayments have been paused again through Aug. 31, consumers holding this debt are eager to find relief.

And criminal scammers are eager to take advantage of consumers.

How It Works

• You receive an unsolicited contact offering to help navigate through state and federal programs to help you reduce or restructure your debt.

•“Debt relief experts” may offer access to instant, easy-to-access loan forgiveness options, often connected to the COVID-19 pandemic.

• These companies might ask for upfront payment or for personal information such as Social Security numbers or FSA ID (the username and password on your loan account).

What You Should Know

• There’s nothing that these companies can research for you that you cannot legitimately find for yourself for free. Often, it is as simple as contacting your loan servicer or the U.S. Department of Education.

• It is illegal for debt relief companies to collect payment from you before they get results, so upfront fees are a surefire sign of a scam.

• Legitimate agencies and loan servicing companies will not ask you for information such as a Social Security number or FSA ID.

What You Should Do

• Visit the Department of Education’s StudentAid.gov site for free information on getting help with federal student loans.

• Resist the urge to act quickly. Research any debt relief firm before providing them information or money, or signing any agreements. A good place to start is your state’s consumer protection office or the Better Business Bureau.

• Report suspected student loan fraud to the FTC and the Federal Student Aid Office.

When it comes to fraud, vigilance is the best weapon. You have the power to protect yourself and your loved ones from scams. If you can SPOT a scam, you can STOP a scam.