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Kentucky Attorney General warning current, former college students of student loan debt relief scam

By Tom Latek
Kentucky Today

The Kentucky Attorney General’s office has issued a scam alert to current and former college students regarding companies offering student loan debt relief for a fee.

Residents of Allen, Breckinridge, Clark, Daviess, Fayette, Jefferson, Kenton, Mason and Warren counties have recently reported receiving strange calls and voicemails from a woman claiming she needs to discuss new federal student loan repayment options. Many getting the calls say they don’t even have student loans but were provided a callback phone number and reference number.

The third-party companies behind the calls claim to offer document preparation services and pretend they can help you qualify for a loan forgiveness program – but they may want upfront fees and personal and financial information.

The AG’s office and the Federal Trade Commission say it is illegal for companies to charge upfront fees before providing debt relief services.

“Far too many Kentuckians already struggle to repay student loans and I don’t want them to get tricked by con artists and fall further into debt,” said Attorney General Andy Beshear. “The truth is, there are no services these fraudsters can offer that you cannot do on your own for free.”

The AG’s office and the FTC say some companies that promise debt relief are scams. To spot them follow these tips:

• Never pay up front — Consolidating federal loan debt with the U.S. Department of Education is free and reputable private lenders don’t require upfront payment.

• Watch out for imposers — Be wary of scammers pretending to be an employee of the federal government. Contact the Department of Education or your private loan servicer via a verified number or website.

• Resist pressure — Know that no company can promise fast loan forgiveness and never rush to qualify for repayment plans, loan consolidation or loan forgiveness programs.

• Beware of legal tricks — Be wary if a company asks you to sign a “power of attorney,” a “third-party authorization” or other such agreements that give third-parties legal permission to talk to your student loan servicer and make decisions on your behalf.

• Never provide sensitive information — Don’t provide your FSA ID or PIN or other personal and financial information to someone who randomly calls you over the phone or contacts you via email.

Since taking office, Beshear and his team have worked to protect students from predatory for-profit colleges and lenders.

Last week, the AG’s Office of Consumer Protection secured $2.2 million in debt relief for former Kentucky ITT Tech students pressured by deceptive lending practices.

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One Comment

  1. Anne Adams says:

    In Calloway Co. also. I have received at least 5. All calls have been ignored. They leave a voicemail message each time offering what you have outlined.

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