Beware Student Loan Scams Amid Rising Payment Concerns

As student loan payments restart, borrowers are increasingly targeted by scammers promising easy debt relief. These predatory companies exploit the confusion and fear surrounding loan repayment, offering to lower payments, cancel debt, or prevent wage garnishment—often for a fee or with false guarantees.

Elaine Rubin, a student loan policy expert, emphasizes that borrowers should be especially vigilant now, as the Consumer Financial Protection Bureau has deprioritized predatory student loan cases, creating a riskier environment. Scams have surged since the pandemic, often triggered by policy changes that cause borrower uncertainty.

Common scam offers include promises to consolidate debt, grant loan forgiveness, discharge debt, lower balances, fix credit scores, or remove loans from default. Rubin warns that legitimate help is available for free, and any company charging upfront fees for these services is likely fraudulent.

Borrowers feeling overwhelmed should seek assistance from reputable organizations such as the Institute of Student Loan Advisors, a nonprofit offering free guidance. The key takeaway is to avoid offers that sound too good to be true and to never pay for services you can access independently.

Recognizing Student Loan Scams

• Promises to erase or discharge your debt for a fee
• Requests for upfront payments to lower balances or consolidate loans
• Offers to fix your credit score or remove loans from default for a fee

Protecting Yourself from Scams

1. Stay informed about current student loan policies and repayment schedules.
2. Verify any loan assistance offers through official government or nonprofit channels.
3. Avoid paying upfront fees for debt relief or loan management services.
4. Use trusted resources like the Institute of Student Loan Advisors for free, reliable guidance.

In an environment where student loan repayment resumes and regulatory focus shifts, vigilance against scams is critical. Borrowers must educate themselves, verify assistance offers, and rely on reputable sources to navigate their debt safely.