In light of the recent Supreme Court ruling impacting the Federal Student Loan Debt Cancellation Program, the Pennsylvania Higher Education Assistance Agency (PHEAA) is cautioning borrowers to be aware of an increase in harmful financial aid scams that could expose them to identity theft and significant financial loss.

Last year, scammers stole an estimated $5 billion from Americans in student loan-related scams, according to a recent report. Scammers use multiple modes of communication to reach borrowers, including social media, text messages, emails and phone calls.

Scammers are also very skilled at posing as government representatives and may even have look-alike government websites and logos to trick unsuspecting victims. Borrowers are encouraged to visit the U.S. Department of Education’s (ED) website,, for information about all available student loan debt relief and repayment plans. Borrowers should never pay for a service that is available to them for free.

Here are some red flags you should look for to avoid being scammed:

  • Claiming to be affiliated with your loan servicer or the ED: The company claims to be associated with the ED or a federal loan servicer, but does not have your loan details readily available in their system.
  • Receiving out-of-the-blue calls, emails or text messages claiming to be from the government: In general, the government will not attempt to contact you using these methods unless you grant permission.
  • Charging upfront fees for free programs or services: Scammers often attempt to charge money for programs and services that borrowers can access for free. Loan forgiveness, loan consolidation, student loan forbearance and deferment are all provided for free by your federal loan servicer.
  • Requesting to sign a power of attorney: Some consumers have been asked to sign a power of attorney or other third-party authorization so they can make changes to their account. Don’t give this power to someone unless you know and trust them.
  • They pressure to decide quickly: Scammers might tell you that you only have a limited time to take advantage of an offer or program. Take your time. An honest company will not pressure you to decide quickly. If there’s any doubt, end the conversation and research the company to confirm whether they are legitimate.
  • They ask you to provide personal information: Consumers reported being asked for their Social Security number, bank information, FSA ID and login information. If you’ve shared your personal information with someone whom you suspect to be a scammer, log in and change your account password as soon as possible. You should also check your account information (contact email, address and phone number) to make sure it’s still accurate.
  • Encouraging you to cease communications with your loan servicer: Scammers will often encourage consumers to end communication with their loan servicer. It's crucial for you to maintain communication with your loan servicer. Avoid any company that urges you to make payments to their company instead of your loan servicer or to stop communicating with your loan servicer.

If you have been targeted by a scammer or think you may be a victim:

  • Cancel your payments.
  • If you realize after the fact, work with your bank to cancel or block your scheduled payment. Banks should have policies in place to help you avoid future fraudulent activity.
  • Contact your servicer. They can help you protect your account. If you signed a power of attorney giving the scammer the right to communicate with your servicer on your behalf, get it revoked.
  • Submit a report to the Federal Trade Commission (FTC) or the ED’s Office of Inspector General.
  • Contact the Pennsylvania Attorney General’s Office, the Pennsylvania Department of Banking and Securities, the CFPB or the FTC.

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