The_FTC

Here are some other red flags for current student loan debt relief scams:

Never pay an up-front fee. It’s illegal for companies to charge you before they help you. If you pay up front to reduce or get rid of your student loan debt, you might not get any help — or your money back.

Only scammers promise fast loan forgiveness. Before they know the details of your situation, scammers might say they can quickly get rid of your loans through a loan forgiveness program — programs most people won’t qualify for. Or they might say they will wipe out your loans by disputing them. But they can’t do either.

A Department of Education seal doesn’t mean it’s legit. Scammers use official-looking names, seals and logos, and tell you they have special access to certain repayment plans, new federal loan consolidations, or loan forgiveness programs. They don’t. If you have federal loans, go to the Department of Education directly at StudentAid.gov.

Don’t be rushed into a bad decision. To get you to act fast, scammers tell you that you could miss qualifying for repayment plans, loan consolidation, or loan forgiveness programs if you don’t sign up right away. Take your time and check it out.

Don’t give away your FSA ID. Some scammers claim they need your FSA ID to help you, but don’t share your FSA ID with anyone. Dishonest people could use that information to get into your account and take control of your personal information.

Certainly, you can consider consulting an attorney barred in your state about your legal options, if you are seeking individual legal advice.

If you feel you have been scammed: First, call your federal student loan servicer and determine the current situation with your student loans. A lot of these companies will change your contact information on file with the servicer, so you want to make sure that is corrected, and find out if your loans might be in default.

It is also a good idea to check your credit report for any suspicious entries. Go to AnnualCreditReport.com to get your free credit report from all three credit bureaus. Right now, you can get your free credit report every week through April 2022.
We have a blog on this topic at: https://www.consumer.ftc.gov/blog/2021/03/free-weekly-credit-reports-during-covid-extended-until-april-2022
Sometimes when people try to cancel with these companies and request their money back, the companies continue to charge you. If you have cancelled services, it is probably a good idea to contact you bank or credit card and discuss how to prevent the company from continuing to withdraw fees. You may be able to get some or all of the charges reversed if you explain they were fraudulent.
We have an article on the FTC’s website with some good advice on what to do if you’ve been scammed: https://www.consumer.ftc.gov/articles/what-do-if-you-were-scammed.
Finally, you can report scams to the FTC: ReportFraud.ftc.gov.

That is a great question! The FTC and the CFPB are both federal agencies that coordinate with each other and share information. These agencies also coordinate with state consumer protection offices, such as state Attorney General’s offices. They each have different areas of authority, but there are areas of overlapping authority—and all three handle student loan debt relief scams.

If you are a victim of a student loan scam, we suggest you complain to the FTC at ReportFraud.ftc.gov. But you should also consider complaining to your state consumer protection office. All three have information materials on their website, for example, at https://www.consumer.ftc.gov/articles/1028-student-loans.

The FTC does not have jurisdiction over all student lenders, however we work together with partner agencies, such as u/FederalStudentAid, that have broader jurisdiction over lenders and servicers.

We can’t comment on particular companies, but we’ve noticed certain warning signs that you can consider. Collecting fees upfront—or, in other words, before providing help with your loans—is a red flag. We’ve also seen scams claim to be working with the federal government or the Department of ED, which is not true. Companies cannot get you faster loan forgiveness, lower interest rates, or better terms on your federal loans than you can get for yourself (for free) because the terms are set by law.