You Don’t Have to Pay for Help with Your Student Loans!
You’re at home about to start cooking (or microwaving, no judgment here) dinner when you get a phone call from an unknown number. The person on the other end of the line is promising to help you pay off all of your student loans. All they’re asking for is some of your personal information and an upfront fee. It sounds too good to be true, right? It probably is.
Even if you haven’t gotten a phone call exactly like that, you have probably seen the countless ads on social media offering to help you manage your student loan debt. While the U.S. Department of Education (ED) does offer some legitimate student loan forgiveness programs and ways to lower your student loan payments, they are all free to apply for through your official loan servicer. Don’t pay for help when you can get help for free!
Here are some signs that you’re talking to a student loan debt relief company instead of ED:
1. You Have to Pay an Upfront Cost or Monthly Fees
A student loan debt relief company asks you for some form of payment in order to help you with your student loans. However, there’s nothing they are charging you for that you can’t do on your own (or with the help of your loan servicer). If you’re having a hard time making your monthly payments, your loan servicer will work with you to switch to a more affordable repayment plan at any time for free!
Your loan servicer is a company that works on behalf of ED. They provide the following services:
- Collect your loan payments.
- Answer any questions you have about your loans.
- Help you decide which repayment plan best suits you.
- Help you switch to a new plan at no cost!
- Manage other tasks related to your loans.
Here’s a list of official student loan servicers that work with the Department of Education:
2. You’re Promised Immediate Loan Forgiveness
No one can promise immediate and total loan forgiveness or cancellation. A company may claim to get rid of your loans quickly, but most government forgiveness programs require many years of qualifying payments and/or employment in certain fields before your loans can be forgiven.
You can find out whether you qualify for loan forgiveness due to your job, disability, the closure of your school, or other circumstances. Your loan servicer also can help you determine if you qualify for loan forgiveness… at no cost!
3. You Have to Provide Your FSA ID Password
ED or your loan servicer will never ask you for your FSA ID password. Your FSA ID is used to sign legally binding documents electronically. It has the same legal status as a written signature. Do not give your FSA ID password to anyone or allow anyone to create an FSA ID for you.
If you share this information or sign a Power of Attorney, you’re giving a debt relief company the authority to take any action they choose, make decisions for you, and act on your behalf.
And if the debt relief company collects fees from you, but never actually makes any payments on your behalf, you will still be responsible for those outstanding payments and late fees.
Think You’ve Already Been Scammed?
Here’s a list of the student loan debt relief companies that the Federal Trade Commission (FTC) has taken legal action against:
If you have already turned over your personal information or paid a student debt relief company, consider one or all of the following options:
- Log in and change your FSA ID. Do NOT share your new FSA ID password with anyone!
- Contact your loan servicer to revoke any power of attorney or third-party authorization agreement that your servicer has on file. You should also make sure no unwanted actions were taken on your loans.
- Contact your bank or credit card company, and request that payments to the company be stopped.
- File a complaint with the FTC.
- File a report of suspicious activity through the Federal Student Aid Feedback System.
Nora Onley is a Digital Engagement Strategist at Federal Student Aid.