Marketers looking to make a buck off student loan borrowers

Wednesday, February 08, 2017

 

Consumer Action is warning consumers about mail solicitations on student loan consolidation and payment plans. The letters appear to be from the U.S. Department of Education (ED) but are actually from for-profit marketers looking to sell student loan borrowers expensive repayment plans that the borrowers shouldn’t have to pay for in the first place (these plans are typically free through the ED). The marketers may also be looking to steal the student’s identity.

The misleading mailings trick borrowers into believing that they are dealing with the federal government consolidation program. The typical solicitation says “Final Notice” in large, bold font and lists the amount of the student’s federal loan balance. It describes the “benefits” of the consolidation plan and directs the borrower to share their Federal Student Aid (FSA) ID. The ED, however, warns borrowers to never share their FSA ID with anyone, since the ID is used to sign legally binding documents electronically and sharing it opens the borrower up to identity theft.

To protect yourself from this scam, read your mail carefully. And if you have any questions regarding your loans, contact the ED’s student aid department directly.

Consumers who believe they are victims of this scam should contact their state attorney general and the U.S. Postal Inspection Service.

Consumer Action offers many free multilingual publications on how to protect yourself from frauds and scams. You can also follow our breaking consumer news alerts and join our mailing list to receive our SCAM GRAM e-newsletter, which will alert you to the dirtiest new scams and frauds each month.

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Through multilingual consumer education materials, community outreach and issue-focused advocacy, Consumer Action empowers underrepresented consumers nationwide to assert their rights in the marketplace and financially prosper.

 

Tags/Keywords

student loans, scams, fraud


 
 
 

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