- Office of Consumer Affairs and Business Regulation
Congratulations to the Class of 2019! As students across the country look toward their future, two-thirds of all college graduates will also begin receiving their first bill to repay college their college loans.
Scammers may try to take advantage of recent college grads by offering services to help lift the burden of student loans, such as lowering your monthly loan amount, “cancelling” your debt immediately, and consolidating multiple federal student loans, but really just charge a staggering price for a service. Scammers may also tell you that you are eligible for loan forgiveness programs; you just need to pay a small fee to get things moving. In reality, the program is fake and the scammer takes your money or personal information (federal student ID) and disappears.
Remember, you will never be randomly selected for a student loan forgiveness program. Student loan forgiveness programs do exist, and it is possible to have your loans discharged, but there is an application and review process. Never believe someone who indicates you’re eligible for loan forgiveness but you need to act quickly and pay right now!
If you do need assistance with repaying your loans, you have options:
- Find your government-approved loan servicer by checking online at https://studentaid.ed.gov/sa/repay-loans/understand/servicers. A loan servicer is a company that handles the billing and other services on your federal student loan and they will work with you on repayment plans and loan consolidation—for free!
- Apply for an Income-Driven Repayment Plan
- Consider refinancing or consolidating your loans
- Options also exist for refinancing or consolidating your private loans.
Finally, it is that important students (and their parents) remember that there is no federal student tax. In 2018, many borrowers reported calls indicating that they owed a federal student tax and that if they didn’t pay the IRS immediately they would be arrested. Not only does this tax NOT exist, but the IRS will never call you and demand immediate payment or threaten you with jail.
If you suspect you are a victim of a student loan scam, change your username and password immediately and stop making payments to the scammer. Contact your lender or servicers as soon as possible and make them aware of the situation. Report student loan scams to FTC.gov/complaint.
