How to avoid student loan scams

Aug 2, 2017 · 3 min read
Source: iStock

If your phone rings and the caller offers to immediately reduce or eliminate your student loan debt — for a fee — be wary. You might be the target of a so-called “student debt relief” company.

These companies typically try to take advantage of student loan borrowers lured by promises of student loan cancellation, forgiveness, credit repair or dramatically lowered payments. While not every solicitation is a scam, they often charge fees for services that borrowers can access for free through their federal student loan servicers.

Do more research before you agree to anything. If you are having trouble managing your federal student loans, there are options you may qualify for to lower your monthly payment at no additional cost, including income-driven repayment plans. Under these plans, the remaining loan balance may be forgiven after a period of time. If you work for a qualifying employer and meet other criteria, the government also offers programs like Public Service Loan Forgiveness.

Student loan scams are increasing and getting more sophisticated. To help ensure you don’t fall victim to scams or pay unnecessary fees, watch out for these warning signs:

  • You are asked to pay fees in advance;
  • Your request for a company name, mailing address or phone number is refused;
  • You feel pressure to make a decision immediately;
  • You are asked for your account number, login credentials or password; or,
  • You are asked to sign paperwork giving the third-party company “Power of Attorney” or legal authority to negotiate on your behalf, and you’re told not to contact your servicer after you complete the paperwork.
Source: Navient

To avoid getting taken advantage of by one of these companies, Navient recommends borrowers follow these precautions:

1. Ask questions. If you suspect the caller may not be your student loan servicer, ask about a loan detail that your servicer could confirm. For example, “Where did I use the loans to help finance my education?”

2. Contact your loan servicer. Contact your student loan servicer with any questions regarding your loans. If you have federal student loans, your loan servicer is assigned by the U.S. Department of Education. If you are having trouble managing your Navient-serviced student loans, contact us. We can help you review your repayment plan options, which may include income-driven plans if you have federal student loans.

3. Protect your personal information. Don’t share personal financial or sensitive information about your federal student aid, such as your servicer account password or Federal Student Aid PIN.

4. Don’t pay for what is available for free. There are no fees to enroll in Income-Based Repayment, Revised Pay As You Earn or other repayment options. If someone requests a fee in exchange for enrollment, it is a scam, and instead you should contact your servicer and ask about how to enroll in these options for free.

Navient is also here to help weed out scammers. We refer suspicious ads and calls to enforcement agencies and help bring imposters to justice.

If you’ve already signed up with one of these firms, change your passwords, contact your bank to stop payments and seek advice to learn about your options.

In addition, you can file a complaint with the consumer protection division of your State’s Attorney General. At the federal level, the Federal Trade Commission has the authority to act against companies that engage in deceptive or unfair practices. Also, file a report of suspicious activity through the Federal Student Aid Feedback System.

More information about how to protect yourself from fraud is available at

Nikki Lavoie is a spokeswoman at Navient, a leading provider of asset management and business processing solutions for education, healthcare, and government clients at the federal, state, and local levels. The company supports more than 12 million student loan customers to successfully manage their loans.


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Navient helps its clients and millions of Americans achieve financial success through services and support.

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