How You Can Spot Student Loan Scams
Starting college? Beware of student loan scams! Don’t pay upfront fees, trust instant loan relief promises, or share login info. Always verify loan companies and report suspicious activity.
So, you’re about to start your college journey — congratulations! If you’re looking to secure student loans to help pay for school, be aware of a scam that could potentially put your financial security at risk.
A student loan scam will promise to help you reduce or eliminate your student debt, but really, they are only trying trick you into paying money or giving out your personal information. You’ll know that you’re talking to a fake student loan company instead of an official federal student loan servicer, if you notice any of these four things:
You’re Asked to Pay Upfront
If you’re contacted by a company asking to pay an upfront fee, monthly fee, or taxes before they help you with the loan, it’s likely a scam. You may be pressured to act quickly and pay them immediately to secure or hold your offer. Know that legitimate student loan agencies never ask for money upfront.
You’re Promised Immediate Loan Relief
Scammers will typically contact you by phone, email, text or social media claiming to be affiliated with the U.S. Department of Education or your loan servicer. They’ll promise to reduce, eliminate, or grant immediate forgiveness to your student loan, or to enroll you in a special program that you qualify for. Remember, if a situation seems too good to be true, it probably is.
They Ask for Your Login Information
If someone asks you for your FSA (Federal Student Aid) ID account username or password, know that it’s a scam. Legitimate loan servicers will never ask for this information.
Also, never give out your personal or financial information unless you know the organization you are giving it to is legitimate. Do your research to make sure it’s a reputable company. You can find a list of verified federal loan servicers that partner with the U.S. Department of Education.
The Loan Company Contacts YOU
Scammers pretending to be a loan servicer may contact you by phone, email, text, or social media and claim to be affiliated with the Department of Education or a reputable organization.
If they promise special access to repayment plans, new federal loan consolidations, or loan forgiveness programs, it's a lie. If you need or already have student loans, go to the Department of Education directly at StudentAid.gov.
What to do if you think you’re involved in a student loan scam:
Don’t panic. Here are some steps you can take to protect yourself and your money.
Contact your loan servicer and the Department of Education to check the status of your loans and make sure they have the correct information. 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 fraudulent student loan debt relief company be stopped. You’ll also need to monitor your credit reports and bank statements for any suspicious activity.
You can contact FAIRWINDS at 1 (800) 443-6887, or visit your nearest branch to report suspicious activity on your account.
Log in and change your FSA ID and any other passwords that you may have shared with the scammer. Do NOT share your new FSA ID password with anyone.
File a complaint with the FTC and report suspicious activity through the Federal Student Aid Feedback System.
Remember, the best way to manage your student loans is to work directly with your loan servicer or the U.S. Department of Education. That way you can protect yourself from student loan scams and avoid paying for services that you can get for free. They can help you apply for loan forgiveness, change your repayment plan, consolidate your loans, or resolve any issues. With the help of these tips, you’ll be able to spot any student loan scam and start your college financial journey off on the right foot!