FRANKFORT, Ky (WEHT) Gov. Andy Beshear and the Kentucky Higher Education Assistance Authority (KHEAA) are warning Kentucky students that if they owe money on federal student loans, they should watch out for scamming loan repayment companies.
The companies offering to help students lower their payments may be charging large fees for services available for free. Some third-party companies claim to offer document preparation services and act as though they can help students qualify for a loan forgiveness program, but they may want upfront fees and personal and financial information.
The Federal Trade Commission says it is illegal for companies to charge upfront fees before providing debt relief services.
The Governor and KHEAA warn borrowers to be skeptical about companies that:
- Ask for payment up front and for monthly fees to monitor an account;
- Promise immediate loan forgiveness; or
- Ask for a student’s FSA ID password and a power of attorney.
If a student doesn’t know what his or her servicer is, that information can be found at https://studentaid.gov/h/manage-loans. If students believe they have been contacted by a scammer, they should report it to the Consumer Financial Protection Bureau here and the Kentucky Attorney General’s Office here