By Ascendium
Education Group

Ever since President Biden announced a student loan debt relief plan in August 2022, student loans have once again taken center stage in the news. But with hopes for student loan reform in the limelight, the stage is set for some bad actors to enter the scene.

The excitement around student loan debt relief makes conditions just right for scammers looking to take advantage of borrowers. Student loan programs are confusing by nature, and many borrowers don’t know that support and access to programs like forgiveness are always available at no cost to them.

These are some of the ways borrowers can identify and avoid student loan debt relief scams:

• They ask for fees upfront. It’s illegal for companies to charge someone before they help them.

• They promise fast loan forgiveness or a balance reduction. Loan forgiveness is not immediate and is only for borrowers who meet specific qualifications. If a company promises quick loan forgiveness or a drastic balance reduction before understanding a borrower’s unique situation, it’s a red flag that warrants attention.

• They use names and seals that seem official. Companies may use names, seals and logos that suggest they are affiliated with the U.S. Department of Education (ED) or other government entities or programs. Companies may say or imply that they have access to certain special repayment plans or forgiveness programs; they don’t. ED has tons of good information about their approved contracted servicers on their website (studentaid.gov).

• They rush decision-making. Scammers count on borrowers not having all the information necessary to make an informed decision. They rely on salespeople to close deals, which means not giving borrowers a chance to reflect or research. If a company states that certain options are expiring or pressures borrowers into making immediate payments or signing up right away, be wary.

• They ask for Federal Student Aid (FSA) IDs. If a company claims that they need a borrower’s FSA ID to help them, look out. Dishonest people could use that information to take control of the borrower’s account and their personal information.

Now that you know who not to work with, here is a trusted resource borrowers can reach out to for no-cost student loan guidance: Wisconsin Student Loan Help Hotline (debtsmarts.org).

Created by the Wisconsin Coalition on Student Debt in partnership with Ascendium student loan borrowers in Wisconsin can call 833-589-0750 with student loan repayment questions. Expert counselors will take the time needed to understand each individual’s questions and provide support and guidance, at no cost to them.