Spotting Student Loan Call Scams: Warning Signs and Prevention

Student loan call scams are a growing concern, with scammers targeting unsuspecting students and borrowers.

Scammers often call claiming to be from the U.S. Department of Education or a student loan servicer, but they're not who they say they are.

Be wary of calls that demand immediate payment or action, as legitimate organizations will never ask for sensitive information over the phone.

Legitimate student loan servicers like Navient, Sallie Mae, and Wells Fargo will never call to demand payment or threaten to garnish your wages.

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If a company asks you to pay up-front fees for help with your student loans, it's likely a scam. In many cases, it's even illegal under D.C. and federal law.

Beware of companies with "federal", "national", or other official-sounding words in their names. They might claim to have a relationship with the government, but it's often a separate entity charging fees for services that are free.

Don't give out your Federal Student Aid (FSA) PIN to anyone, not even a student debt relief company. They might make changes to your account that you don't want.

Be wary of ads that promise immediate relief, forgiveness of your loans, or guaranteed results. These are unrealistic and often scams.

Here are some red flags to watch out for:

Check email addresses and URLs carefully. Legitimate emails from FSA will come from [email protected], [email protected], or [email protected].

If a company claims to help you with your student loans, be cautious of their tactics. Here are some warning signs of a scam:

You might be required to pay up-front fees, which is a big red flag. In many cases, it's even illegal for companies to charge advance fees for debt relief services, especially if you enroll over the phone.

Companies may use official-sounding names or claim to have a relationship with the government to trick you into paying fees for free federal program benefits. If a company claims to be affiliated with the federal government, it's likely a scam.

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You should never share your Federal Student Aid (FSA) PIN with anyone, including student debt relief companies. If you do, they might make changes in your account that you don't want, leading to problems like defaulting on a loan.

Be wary of ads that promise unrealistic services like complete loan forgiveness or immediate loan reduction. If a website doesn't include ".gov" in its address or doesn't belong to one of the government's official loan servicers, it's likely a scam.

Here are some warning signs to watch out for:

The U.S. Department of Education works with six loan servicing companies: Edfinancial, MOHELA, Aidvantage, Nelnet, ECSI, and Default Resolution Group. You can find your student loan servicer through the Federal Student Aid website or by calling the Federal Student Aid Information Center at 1-800-433-3243.

To verify a legitimate loan servicer, check if their website or email address ends in .gov. The Department of Education also contracts with private companies to handle billing, repayment plans, loan consolidation, and other services. These companies are listed on the Federal Student Aid website.

If you receive an email from a government agency, hover over the From/To section to verify the sender's email address. Legitimate email addresses from the Department of Education include [email protected], [email protected], and [email protected].

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If you can't afford your student loan payments, there are legitimate ways to reduce your payments or pursue loan forgiveness. You can sign up for an income-based repayment plan to reduce your payments.

To explore forgiveness options, you can work with your servicer. They can help you navigate the process.

Consolidating your federal student loans into a Direct Consolidation Loan can extend your repayment term up to 30 years. This can make your monthly payments more manageable.

Refinancing your student loan can possibly give you a lower interest rate and reduce your overall costs. However, keep in mind that if you refinance federal student loans, you'll lose access to federal benefits and protections.

If you decide to refinance, shop around and compare as many lenders as you can. This way, you can find a loan that fits your needs.

Here are some legitimate options to consider:

Remember to thoroughly research your options so you can make an informed decision on how to handle your student loans.

Your loan servicer works on the government's behalf to collect your loan payments, answer any questions you have about your loans, help you decide which repayment plan is right for you, and help you switch to a new plan at no cost.

There are six loan servicing companies that the Department of Education works directly with: Edfinancial, MOHELA, Aidvantage, Nelnet, ECSI, and Default Resolution Group.

These legitimate loan servicers provide free services to borrowers, including helping with repayment plans and loan consolidation.

You can locate your student loan servicer through your account dashboard on the Federal Student Aid website or by calling the Federal Student Aid Information Center at 1-800-433-3243.

If you need help with your federal student loans, make sure you're contacting a U.S. Department of Education affiliated company that you can trust.

Here are the official loan servicers to look out for:

To verify the legitimacy of your loan servicer, check that their email address ends in ".gov" and hover over the From/To section in your email to verify the sender's information.

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If you've been targeted by a student loan scam, alert your student loan servicers and find out if there have been any changes to your account. Contact any bank or credit card companies associated with your student loans to stop payments to the scammer and change your passwords. Change the passwords associated with your student loan servicer and StudentAid.gov account.

File a report with the Federal Trade Commission or your state's attorney general. You can also register a complaint with the Consumer Financial Protection Bureau. If you're unsure about a company's legitimacy, submit suspicious activity to the Federal Student Aid website.

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When checking official communications, be aware that scammers can use official-looking names, seals, and logos, but they're not always trustworthy.

Always double-check the sender's email address to ensure it matches the official communications from us and our partners. Emails from us will only come from specific addresses.

Be cautious of unofficial addresses or phone numbers, as they can be used by scammers to trick you. Text messages from us will only come from 227722 or 51592.

If you think you've fallen victim to a student loan scam, act fast and follow these steps. Contact your federal loan servicer to ensure no unwanted actions were taken on your loans, and revoke any authorization agreements.

Contact your bank or credit card company to stop all payments to the scammer. This will prevent further unauthorized transactions. A scam artist with access to your personal information could open a credit card or bank account under your name, so it's worth monitoring your credit.

CreditWise from Capital One is a free service that tracks your credit score and alerts you if your Social Security number or other personal data has been run by a creditor. This can help you catch any suspicious activity early on.

To report the scam, file a complaint with the Federal Trade Commission, your state's attorney general, or the Consumer Financial Protection Bureau. You can also submit suspicious activity to the Federal Student Aid website.

Here's a summary of the steps to take:

Change your passwords for your FSA ID, student loan account, and bank or credit union accounts. Make sure to use strong passwords that will be difficult for scammers to guess.

If you're struggling to pay your student loans, it's natural to consider seeking help. Your first step should be to contact your loan servicer, as they can assist you in lowering your monthly payment, consolidating multiple loans, switching to a new repayment plan, or determining if you qualify for loan forgiveness - all for free.

Some debt relief companies may charge a fee for services that you and your servicer can work out together, but this is not always the case. In fact, it's generally a bad idea to pay for debt relief help, as many companies will charge you an upfront fee that's often illegal.

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You can apply for forgiveness programs or loan consolidation on your own without paying a company to do it for you. To get started, contact your loan servicer or visit StudentAid.gov for instructions on how to manage your loans or apply for student loan forgiveness programs.

Here are some services that your loan servicer can provide for free:

Remember, if a company requires payment before they'll help, it's likely a scam. Legitimate companies will not demand upfront fees, so be wary of any company that asks for payment before assisting you.

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