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Illinois officials warn students about new scam targeting loan borrowers

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Friday, November 22, 2024

Illinois officials warn students about new scam targeting loan borrowers

State AG
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Illinois Attorney General Kwame Raoul | Twitter Website

Attorney General Kwame Raoul and the Illinois Department of Financial and Professional Regulation (IDFPR) have issued a warning to student loan borrowers about a new scam exploiting uncertainty around student loans. The scam involves false promises of lower monthly payments or loan forgiveness, often requiring upfront fees.

Borrowers are reminded that these services can be requested for free from the U.S. Department of Education or their student loan servicer. Scammers have been contacting individuals through various means, falsely claiming affiliations with government agencies, including the Department of Education.

“The current landscape for loan repayment is especially confusing due to pending legal challenges to federal relief programs, and scammers may try to exploit that uncertainty,” said Illinois Attorney General Kwame Raoul. He advised borrowers to seek information directly from the Department of Education or their loan servicer to avoid scams.

IDFPR Secretary Mario Treto, Jr., emphasized that borrowers do not need to pay for assistance and should contact their loan servicer or the U.S. Department of Education for help. Susana Soriano, Acting Director of Banking, highlighted consumer financial education as a priority and stressed promoting legitimate avenues for learning about student loan forgiveness programs.

Red flags indicating potential scams include promises of immediate loan forgiveness, requests for power of attorney forms, high-pressure sales tactics, requests for Federal Student Aid login credentials, and claims of relationships with government agencies.

The U.S. Department of Education and the Federal Trade Commission offer resources for identifying scams. Borrowers contacted by scammers should call the Illinois Attorney General’s Student Loan Helpline at 1-800-455-2456 or file a complaint on the Attorney General’s website if they believe they have been scammed.

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