Kentucky college students should beware of a scam from companies that say they will erase student loan debt in return for a large fee and personal information, Attorney General Andy Beshear warned Tuesday.
“As attorney general, this scam angers me because it preys on students who are already overwhelmed with going to school, working a job and raising a family,” Beshear said during a news conference at Bluegrass Community and Technical College. “I’m pledging the full resources of my office to prevent these companies from scamming our students.”
Beshear said community college students are particularly susceptible because many of them transfer to four-year colleges and become targets of companies who pressure them to consolidate their loans for a fee. Students should contact their current loan companies so they can offer changes to repayment plans for free, Beshear said.
The attorney general’s Office of Consumer Protection is investigating several companies who purport to erase student loan debt, and is asking students who have been a victim to contact his office by phone at 888-432-9257 or by completing a complaint form.
Students should look for warning signs when contacted by loan companies, including high pressure sales pitches and demands that the student sign a contract. Students should also beware if any company promises immediate loan forgiveness, debt cancellation or complete forgiveness after a certain number of payments.
Debt relief companies do not have the ability to negotiate with creditors for “special loan forgiveness” under federal student loan programs. Students should never give away personal information, such as their federal student aid PIN number, Beshear said.
If students have questions or concerns about repaying student loans, they should contact their service provider directly to discuss repayment options or by calling the Federal Student Aid office at 800-433-3243.
If students have problems with their student loan servicer or debt collector, they should contact the Student Loan Ombudsman of the U.S. Department of Education at 877-557-2575.