BBB Tip: Student loan forgiveness
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Due to the uptick in student loan forgiveness scams, the FTC has sent more than $4.1 million in refunds to borrowers who lost money to scammers.
Luckily, the U.S. Department of Education has provided borrowers with the following Do’s and Don’ts as they apply for student loan debt relief.
DO create an FSA ID at StudentAid.gov. You will not need it for the debt relief application, but having an FSA ID allows easy access to accurate information on your loan. It also makes sure FSA can contact you directly, helping you equip yourself against scammers trying to contact you. Log in to your current account on StudentAid.gov and keep your contact info updated. If you need help logging in, follow these tips on accessing your account.
DO make sure your loan servicer has your most current contact information. If you don’t know who your servicer is, you can log into StudentAid.gov and see your servicer(s) in your account.
DO report scammers to the Federal Trade Commission by visiting reportfraud.ftc.gov.
DON’T pay anyone who contacts you with promises of debt relief or loan forgiveness. YOU DO NOT NEED TO PAY ANYONE TO OBTAIN DEBT RELIEF. The application will be free and easy to use when it opens in October.
DON’T reveal your FSA ID, account information, or password to anyone who contacts you. The Department of Education and your federal student loan servicer will never call or email you asking for this information.
DON’T ever give personal or financial information to an unfamiliar caller. When in doubt, hang up and call your student loan servicer directly. You can find your federal student loan servicer’s contact information at Studentaid.gov/manage-loans/repayment/servicers.
DON’T refinance your federal student loans unless you know the risks. If you refinance federal student loans eligible for debt relief into private loans, you will lose out on the one-time debt relief and flexible repayment plans for federal loans.
How to protect yourself from student loan scammers:
- Research the lender. Visit BBB.org to read business profiles and check out companies before working with them. The FTC has consumer education related to student loan debt relief scams.
- Report it. If you have been a victim of a suspected scam, report it at BBB.org/ScamTracker.
- Empty promises lead to an empty wallet and more debt. Only scammers promise fast loan forgiveness. Scammers often pretend to be affiliated with the government. Scammers also promise loan forgiveness for a fee. Never pay a fee upfront for help. Never share sensitive information, such as your FSA ID.
- Find a reliable source. Consumers can apply for loan deferments, forbearance, repayment, and forgiveness, or discharge programs directly through the U.S. Department of Education or their loan servicer at no cost and do not require a third party. For students in Canada, find more information about student loans and grants.
For more information
Read more on BBB.org about government impostor scams or the report released by the BBB Institute for Marketplace Trust. Check out our Scam Tips Resource Page for more tips on avoiding scams.
If you’ve spotted a student loan forgiveness scam (whether or not you’ve lost money), report it to BBB.org/ScamTracker. Your report can help others avoid falling victim to scams.
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Additional Resources
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