Many student borrowers have recently filed complaints with the Consumer Financial Protection Bureau (CFPB) about companies promising them student loan forgiveness or loan forbearance in exchange for fees amounting to hundreds or thousands of dollars. Borrowers thought they were talking to their manager or a company authorized by the Ministry of Education, as they often knew private information such as the borrower’s loan balance or recent consolidation activity. It is fraud.
Legit options to get rid of your federal student loans from April 2022:
- Loan forgiveness is not available to all student borrowers at this time, although there are as public service employees. There are also instances where the borrower may qualify for .
- Federal Student Loans Services cannot charge you to apply for loan forgiveness, income-contingent repayment (IDR), deferral or forbearance, or to file any other documents. Federal loan servicers charge no application or processing fees to consolidate your federal loans into a direct consolidation loan.
- The CARES Act pause on payments and interest for federally held student loans has been extended until August 31, 2022. Forbearance on eligible loans will occur automatically. No one will contact you to enroll in the CARES Act forbearance. There is no cost to enroll in the CARES Act forbearance. If your payment will be too high at the end of the break, please contact your service agent directly to explore a variety of payment relief options. Your federal loan officer will not charge you any application or processing fees to help you switch to a different repayment plan such as an IDR plan or enroll in one of the deferment or forfeiture options that are available to you.
Here are some red flags to watch out for
Charge upfront fees for free programs
Scammers often attempt to charge for programs that all borrowers can access for free, including document preparation. or discharge (to the extent these programs are available to you), , forbearance, and student loan deferment are all free programs provided by your servicer. If a company asks you to pay large sums of money upfront, it is likely a scam and should be reported. Do not give money or personal information to the company. Contact your loan officer to determine your options. You can find out who your repairer is by or by calling 1-800-433-3243.
Pressure to decide quickly
Scammers might tell you that you only have 24 hours to take advantage of an offer or program. This is a red flag. Most programs offered by the government do not require this sense of urgency. Confirm if it is a legitimate company before taking further action.
Encourage you to cut off communications with your loan officer
This is a warning sign that this company is not working in your best interest. As a student borrower, it is important that you maintain communication with your service agent. If someone urges you to make payments to their business instead of your loan officer or to stop communicating with your loan officer, don’t give them any information. Don’t stop making payments to your repairer.
Claim to be affiliated with your loan officer or the Ministry of Education
Scammers can name depository organizations where you have a loan account. Pay attention to statements such as “we work with the Ministry of Education” or “we are in partnership with your loan officer”. If someone contacts you and claims to be in partnership with your loan officer, hang up the phone and contact your loan officer directly to confirm. Call the number listed on your billing statement or through your repairer’s web portal. Do not use contact information provided in an email or voicemail.
There may be times when your student loan officer contacts you about the Public Service Loan Forgiveness (PSLF). As part of a recent settlement with the CFPB, Edfinancial, a federal student loan servicer, is required to contact all of its Federal Family Education Loan Program (FFELP) borrowers to advise them of the so that eligible borrowers can take advantage of the waiver before it expires.
Request personal information by e-mail or telephone
Scammers often ask for personal information such as your full social security number, bank account number, FSA ID, or studentaid.gov password. Do not give any personal information to an unverified company over the phone. If you think the caller is a scammer, hang up and to determine if there are any actions required for your loan. If you have provided your personal information to a scammer, we have listed some tips below to avoid scams.