Reddit Student Loans

How to Identify a Student Loan Scam

It seems it’s time to sticky another post about this based on recent sub activity.

**Here’s the most important bit – you should never have to pay for help with your student loans. There isn’t a person or entity on the planet that can get you a better deal, or access to a benefit or program, that you can’t get yourself, for free, by working directly through your loan holder.**

The second most important bit is the old school – if it sounds too good to be true, it almost assuredly is.

While it’s not illegal to charge for student loan help, many of the companies that do also engage in what is absolutely fraudulent and deceptive behaviour. If you experience any of the following, we here at /r/studentloans encourage you to report it to your local attorney general’s office and the Federal Trade Commission as well as the Department of Education. All of these entities are actively pursuing and taking enforcement actions against these companies.

Warning signs/things to report:

Company claims to “work with” or partner with the Department of Education on any of the student loan servicers

Claims you can receive forgiveness, especially before knowing anything about your student loan balance and loan type

Mentions “the Obama forgiveness program” – there’s no such thing

Creates a sense of urgency for you to sign up right away

Asks for a power of attorney over your loan accounts

Asks for any of your FSA or other passwords or PINS (never give those – to anyone)

Many of these companies ask for a large up front enrollment fee – anywhere from six hundred to twelve hundred dollars and then a monthly fee of around 39 bucks. They often infer that the monthly fee is actually your student loan payment. For these fees they will consolidate your loans – which you can do easily – for free – at www.studentloans.gov and often put the loans in forbearance – so no payment is due but interest is still accruing – and take you thirty nine dollars every month to “monitor” the account – i.e. do nothing.

I have personally worked with a borrower who had been in repayment for fifteen years when she was snagged by one of these companies. They had her sign a POA and used it to change all the contact info on the account to their own address and phone number. She paid a few thousand up front and the typical thirty nine bucks monthly – she thought that was her payment. After three years she gets a call from the feds – her loan was in default and double what it was when she started. They’d put it in forbearance until they couldn’t anymore – then just let it go delinquent and default and disappeared with her money. The feds only found her through skip tracing. And there was nothing anyone could do for her

Here’s some additional reading on these companies https://www.ftc.gov/news-events/press-releases/2018/06/student-loan-debt-relief-scam-operators-agree-settle-ftc-charges

https://www.consumer.ftc.gov/articles/1028-student-loans

https://www.nerdwallet.com/blog/dont-trust-companies-student-debt/

How to Identify a Student Loan Scam – RobinHood – Reddit Feed


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29 Comments

  • I’ve been the victim of one of these scams and I’m ashamed to say they took $750 from me before I realized they were a scam. I canceled my credit card and I haven’t heard from them since. Please share OP’s post with anyone you know I’m student loan debt.

  • the bold section of this post ought be the subreddits “about me”

    if someone calls you proactively and you are unsure of credibility, don’t hesitate to hang up, verify who your loan servicer is, and initiate that phone call first to ensure you are being routed to the appropriate place to receive assistance.

    the #1 mistake made in student loan repayment is being naive to the options. #2 is ignoring them/burying a head in the sand. don’t hesitate to make the call and ask for help

  • Thank you for the reminder. Last year I almost got suckered into one of these scams! But I was on the phone Googling the company while they were trying to convince me to cough up $500 for reduced payment of 0. Good thing I didn’t like the search results…

  • As someone who works at a collection agency collecting on student loans, you’re 1000% correct!

    They do not get special treatment for calling on your behalf, if anything you’d get a worse deal working with a third party company claiming to help because a lot of those employees don’t really know how the student loans work or how to negotiate on their clients behalf.

    If you need help, pick up the phone and call them and just be honest with what’s going on, trust me shit happens, not many people go into collections on purpose, most have shit that happens in their lives, we understand and will work with you!

  • I would argue that student loans are themselves a scam. Teenagers are groomed all the way through high school to believe they have no option except going to college, a college degree is worth way less these days especially considering the ridiculous heights tuition costs have reached, unemployment among recent college graduates is rampant, and there’s basically no way to discharge the loans in bankruptcy unlike almost all other debts. So we have college graduates left and right working menial jobs and with little chance of getting out of the hole. Taking out student loans can easily be a life-destroying decision.

  • This fall I got a letter from the IRS saying I qualify for reconsolidation. Fast forward a couple of months later and following through with the letter, to me paying Nexum Solutions (or services?) an $800 reconsolidation fee, and and $39 monthly fee for the duration of the entire loan. WTF!
    They have set me up with Great Lakes, who I know several friends have and paying their student loans through.
    But damnit someone tell me this Nexum Solutions/services is bullshit and I need to get my money back asap.
    I feel I was better off with my original guys at Nelnet.

  • Yeah, I signed up for one of these companies a few years ago, until my boyfriend, who knew more about this than I did, told me it was a scam. I called them back; told them I changed my mind and revoke all access. I told them to credit my card and send me an email with a credit. Then after a few days, once the credit hit back, I cancelled my card and changed all my passwords

  • Been getting a bunch of calls on my cell lately. How did they get my number?

    Also, thoughts on counseling/planning services such as Student Loan Planner? Heard a podcast with their CEO recently – work mostly with people with huge balances and I want to say a flat rate in the ballpark of a few hundred dollars.

  • I’ve gotten 3 voice mails in the past week from a man who says he’d like to talk about an update to my student loans due to the class action lawsuit. I haven’t returned the call. Safe to say this would also be something fishy?

  • Sigh… I signed up for one today but something didn’t sit right. Maybe it’s all those Dave Ramsey podcasts I listen to. So as soon as I got off the phone with him, I decided to search reddit for things about this, found my answers here, cancelled, and should get my refund within the next 10 business days. I love how quickly they can take a payment but man, it takes a while to get it back. In the meantime, I went through [studentloans.gov](https://studentloans.gov). Thank the Gods for reddit.

  • I’ve been getting a call from a lady about my student loans for the past 2 weeks

    She starts with “Hi my name is….. this is in reference to your federal student loans… make a repayment plan because of some big changes. She gives me her number and a reference number to make it easier. Is this legit or a scam?

  • Another sure sign it’s a scam:

    They proactively call you about pre-qualifying you for a loan, when you’ve already gotten your bachelor’s degree and already paid off all of your loans.

  • I received a letter from a company called CSN, Student Loan Recovery Services stating they were(could) garnish my wages. I have been paying what I thought was all of my SL’s for as long as I can remember, and am so close to having them paid off. I spoke with a representative and asked what this supposed debt pertained to. He verbally told me they took over this loan that was originally with WF a couple of months ago. I requested that they send verification of the debt I owed and I was told they’ve already done so, weren’t required to do anything more and if I could either pay the debt or they will pursue further action. Needless to say the gentleman was very rude and offered me a 50% settlement if I paid what would have been a couple days ago. In an effort to figure out what is going on, I have called my original servicer WF, who then told me to contact The department of education. My current Fed loans are with Navient, Everything is good on their end. I don’t show anything in collections but I do have 3 loans on my credit report that were transferred to another office. Could this have been Navient? I cannot seem to find out who these particular loans were transferred to. Are these guys trying to scam me? I do not feel comfortable giving any money to a company I’m not sure is legit, and I’m not exactly sure where to go from here. Yikes!

  • Been getting calls almost every day about loan scams. Always a diff number or area code, but same automated lady

    Finally started going through to a real person and said “take me off your call list NOW!” They called again this morning and I said it again. Going to start logging info for the next time to build up a harassment case (or whatever I can get)

  • I’m starting to think that I may have just been scammed.

    I got a phone call from a “document preparation” company. They told me that $10,000+ of loans would be “forgiven” after talking to me about my income.

    They were able to pull all of my loan info with my name and DOB.

    They are asking for $256 for the first 4 payments and $9/month after the first 4.

  • My co-signer is convinced she found a company that is not a scam. It does have an A1 rating from the BBB. I’m still so gun shy. They wan to discharge my private student loans for the small price 12k. It smells funny to me. I have over 80k in private student loans that are currently 120 days past due.

  • Is [http://www.studentscounselingcenters.com/](http://www.studentscounselingcenters.com/) a scam? I have a situation where one of the schools I went to is part of a lawsuit [https://www.forbes.com/sites/zackfriedman/2019/01/07/student-loan-forgiveness-for-profit/#696055067ee9](https://www.forbes.com/sites/zackfriedman/2019/01/07/student-loan-forgiveness-for-profit/#696055067ee9) and they say that I am eligible to that that part of my student loans wiped away, but I have to pay them $800 and then told it could take up to two years before it removed. They also mentioned that i MIGHT be reimbursed for what I have paid. I didn’t pull the trigger yet, cause I am not sure. Any insight I could get would be super helpful.

  • Anyone else had a experience with Nexum Services/Solutions? I think I’ve been scammed. Similar stories..paid $800 initial fee, $39 monthly since November. My money hasn’t been going towards my loan. I cancelled my card account, but not sure what else to do. Tried filing complaint with FTC through the CFPB, but they said they were unable to send the complaint off, because Nexum was not in the register. They called me today about paying, since I cancelled my account, but I am trying to figure out what I should do before calling back. I am concerned that it could impact my credit score? Not sure. Any insight would be great.

  • I’ve just run into something similar. My loans are through Sallie Mae (stupid decision, I know), are private, and thus aren’t qualified for any sort of student loan forgiveness. My dad messaged me last week, saying he got an email from someone saying that (this is my dad’s phrasing) “Sallie Mae got in trouble with the government for not notifying their customers about student loan forgiveness…They said we could get 90% off the loans. They have my info but they need yours right away”.
    At first I thought it was awesome, but as always put off calling the number because I fucking hate phone calls and avoid them at all costs. Good thing I waited, because I thought to Google the number. It pops up on a bunch of sites warning about tech support scams (fake malware message pops up on device and tells you to call a number to resolve it, they get you to give them remote access and then steal credit card information off your device).
    I also realized while looking at that…my loans would have never qualified in the first place for loan forgiveness since they’re private, so Sallie Mae wouldn’t have needed to tell me about it. Navient got in deep doodoo for doing that, but they do federal loans that would be able to qualify. So these guys were relying on the fact that people would remember the Navient lawsuit, not know the difference between Sallie Mae and Navient (now two separate corporations), and would fall for their bananas.
    I asked my dad to forward me the email so I could take a closer look at it, but he deleted it. /facepalm/ Luckily he didn’t give them any information that would let them steal his identity or mess with his credit cards, once he told them it wasn’t his loan they asked him to get me to call. Dodged a good one there!

  • Has anyone received an automated phone call from “Karen” saying she is letting you know your student loans will be cancelled? I hung up because I figured FAFSA would contact me through email if this was the case rather than an automated phone call that started with a name instead of an identifier such as “we are calling from *insert fedloan company*”. I tried to search the number and the Karen thing but nothing shows up. Wondering if I should’ve listened to the full call?

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