Illinois Attorney General Kwame Raoul warns of new scam targeting student loan borrowers
CHICAGO (CBS) — Attorney General Kwame Raoul and the Illinois Department of Financial and Professional Regulation issued a warning on Thursday about a new scam targeting student loan borrowers.
The scam offers fake promises of lower monthly payments or loan forgiveness with immediate results and demands upfront fees.
Scammers have contacted borrowers by phone, text, email, and postal mail with a falsified claim to have ties to government agencies, including the Department of Education.
Tips to identify the scam:
- Promises of immediate loan forgiveness or cancellation. Student loan debt relief companies cannot forgive student loans. Any changes to federal student loan repayment plans will be made through one of the government's official loan servicers. Learn more about federal student loan repayment programs for free from the U.S. Department of Education. Private student loan borrowers should also contact their student loan servicers for accurate information.
- Requests to sign a power of attorney form. Legitimate student loan assistance programs will not typically require you to sign an agreement giving them legal permission to act on your behalf.
- High-pressure sales tactics attempting to force you into acting immediately by creating a false sense of urgency. Phrases commonly used are "Savings Plans Available for a limited time only!" "Results Guaranteed!" "Call Now!" "Get Your Student Loans Forgiven Now!"
- For federal student loans, requests for your Federal Student Aid username and account in exchange for help with your student loans. Borrowers should never share their login credentials.
- Statements claiming relationships with government agencies, including the Department of Education. Again, borrowers should contact their student loan servicers for accurate information. Borrowers contacted by these scam companies should not engage with them but should reach out to their student loan servicers or the U.S. Department of Education if they need help.
The U.S. Department of Education and the Federal Trade Commission both offer resources to help identify student loan scams. Borrowers can typically request those services at no cost from the U.S. Department of Education or their student loan servicer.
Borrowers who are contacted by these scammers are advised to call the Illinois Attorney General's Student Loan Helpline at 1-800-455-2456 for assistance. Raoul also encourages borrowers who believe they were victims of a scam to file a complaint with the Illinois Attorney General's Office by visiting the office's website.