LEXINGTON, Ky. (WTVQ) – Attorney General Andy Beshear and Bluegrass Community and Technical College President Dr. Augusta Julian are warning Kentucky college students about a scam that promises student loan debt relief services in exchange for a large fee and students’ personal information.
Attorney General Beshear joined President Julian today on the BCTC Newtown Campus in Lexington to raise awareness about the scam and ask students to avoid these companies.
“BCTC and the entire community and technical college system do an outstanding job preparing Kentuckians for the 21st century workforce,” Beshear said. “Many of their students will transfer to a four-year university where they need another loan, and become targets for these companies who pressure students to consolidate their loans for a fee. As Attorney General, this scam angers me because it preys on students who are already overwhelmed with going to school, working a job and raising a family. I’m pledging the full resources of my office to prevent these companies from scamming our students.”
Beshear said all loan services are already offered free to students by their loan companies, and students should contact their current student loan company that can offer changes to a repayment plan at any time for free.
“BCTC students have many challenges, and most have to work hard to prepare for better lives,” President Julian said. “Loans are sometimes the only way they have to get their education or workforce preparation. It is maddening that people would target vulnerable students. I applaud the Attorney General’s focus on this problem and hope students are listening. They deserve support from all of us.”
Beshear said his office of Consumer Protection is currently investigating several of these companies, and is asking students who have been a victim to contact his office by phone, 888-432-9257, or by completing a complaint form.
Beshear and Julian said there are several warning signs students should look for when contacted by these companies:
- Beware if a student loan debt relief company contacts you with a high-pressure sales pitch and demands that you sign a contract and pay for services or fees up front.
- Beware if these companies make promises of immediate loan forgiveness, debt cancellation or complete forgiveness after a certain number of payments. Debt relief companies do not have the ability to negotiate with your creditors for “special loan forgiveness” under the federal student loan programs currently in place.
- Beware if a student debt relief company asks you for your personal or account information, such as your bank account or your federal student aid PIN number. Your PIN is an ID number issued by the U.S. Department of Education to allow you access to information about your federal student loans and should be kept private.
- Beware if the company asks you to sign a “power of attorney” or a “third party authorization.” These are written agreements signed by you and the parties giving them legal permission to talk directly to your student loan servicer and make decisions on your behalf.
If students have questions or concerns about repaying student loans, they should contact their service provider directly to discuss repayment options by calling Federal Student Aid at 800-433-3243.
If students have problems with their student loan servicer or debt collector, they should contact the Student Loan Ombudsman of the U.S. Department of Education at 877-557-2575.