Many college students take out loans to help pay for higher education, but scammers prey on those in debt with student loan forgiveness “programs,” according to a news release from Arkansas Attorney General Leslie Rutledge.
Scammers will pose as government agencies offering to help with complicated federal student loan debt or claim to be independent organizations that are aware of new changes in repayment programs. But offers that don’t come from an assigned federal loan servicer are a scam.
“Student loan debt can be intimidating,” Rutledge said. “Con artists often make unrealistic promises, such as drastically reducing or doing away with monthly payments altogether. While this may seem attractive at first, it can be detrimental in the long run, accumulating interest and potentially sliding into default. Some of these scammers will even charge for their assistance.”
Rutledge released the following red flags of a student loan forgiveness scam:
• Borrowers are instructed to stop paying on the loans.
• Borrowers are offered a promise of guaranteed reduced payments and/or loan forgiveness.
• The scammer requests Federal Student Aid username or passwords (FSA ID).
• Borrowers are instructed to ignore letters or emails from a federal loan servicer.
• The scammer stressed the difficulty for the average person to navigate the Federal Student Aid system.
If Arkansans believe they have been victims of one of these companies, they should contact the federal loan service and update account information by changing all passwords and cancel any automatic withdrawal payments.
Financial aid basics and student loan repayment questions can be answered at StudentLoans.gov. The National Student Loan Data System is the Department of Education’s central database and has information for the specific federal loan servicer assigned to collect student loan payments.
For more information and tips to avoid scams and other consumer-related issues, contact the Arkansas Attorney General’s office at 800-482-8982 or email@example.com or visit ArkansasAG.gov or facebook.com/AGLeslieRutledge.