Consumer Alert: Student Loan Scams

FROM THE WISCONSIN DEPARTMENT OF AGRICULTURE, COMMERCE AND CONSUMER PROTECTION

Following an August 24 announcement, the pause in federal student loan repayments has been extended until December 31, 2022. Several changes have also been made to Department of Education policy, including the cancellation debt, income-tested repayment plans and Ministry of Education policy. Service Loan Rebate Program.

In light of this announcement, student borrowers in Wisconsin and the United States are eager to get the best possible deal on their repayment plan. Scammers know this and target student borrowers with attractive but illegitimate offers. These “student debt relief companies” claim that they can help borrowers get debt forgiveness or forgiveness, lower monthly payments, consolidate loans, etc., for a certain price. Consumers are informed that the offers of these companies can generally be made free of charge by the borrowers themselves. Mistrust:

  • Initial fees or charges.
  • Promises that sound too good to be true.
  • High pressure sales tactics like “limited time offers”.
  • Claims of a special relationship with the federal government or the Ministry of Education.
  • Requests for identification from your Federal Student Aid (FSA) or signing a form granting authorization or power of attorney to a third party.

Granting a scammer your FSA ID, Third Party Authorization or Power of Attorney will allow them to access your account, take control of your personal information and change your contact and payment details without your knowledge. It can be difficult to recover your account after a scammer has taken over it, and the best way for borrowers to protect themselves against student loan fraud is to prevent it from happening. If you are the victim of a fraudulent student debt relief company:

  • File a complaint with the Wisconsin Department of Agriculture, Commerce, and Consumer Protection’s Office of Consumer Protection (DATCP).
  • Change your FSA ID and account passwords.
  • Contact your loan servicer to revoke any third party authorization or power of attorney on file and confirm that no adverse actions have been taken on your loans.
  • Contact your financial institutions to request that payments to the company be stopped.

Trusted resources for student loan information and questions include Look forward to your future by the Wisconsin Department of Financial Institutions, the Wisconsin Student Loan Debt Hotline at 833-589-0750, and StudentAid.gov.

For additional information and resources, or to file a complaint, visit the DATCP Consumer Protection webpage at ConsumerProtection.wi.gov. If you have questions or think you’ve been the victim of a scam, report it by calling DATCP’s Consumer Protection Hotline at 1-800-422-7128 or emailing [email protected].

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