Don’t Be Fooled: You Never Have to Pay for Student Loan Help

Cross-posted from Medium.


I’ve seen online ads claiming that “Obama Wants to Forgive Your Student Loans!” or “Erase Default Statuses in 4–6 Weeks!” The link takes you to companies that want to help you manage your loans — for a fee. You never need to pay for help with your student loans. For the great price of free, the U.S. Department of Education can help you:

Your loan servicer — the company that collects your payments on behalf of the Department of Education can also help you with these goals for free. If you need help with your debt, you should contact your servicer. Click here for a list of servicers’ contact information.

And you should — because you never need to pay for these services.

Some debt relief companies charge a lot. Our research shows that some companies charge upfront consolidation fees as high as $999 or 1 percent of the loan balance (whichever is higher); “enrollment” or “subscription” fees up to $600; or monthly account “maintenance” fees as high as $50 per month. That’s money out of your pocket for services that are available to you for free.

Unfortunately, some companies act unethically or illegally to get your business — misrepresenting themselves as having a relationship with the Department of Education by using our logos, violating students’ privacy by inappropriately using their FSA IDs, and claiming that government programs are their own. In fact, yesterday, the Department sent two of these companies cease and desist letters because they have inappropriately used our logo, giving the impression that they are working with or for the government.

We are taking action to crackdown on these companies and continuing our efforts to protect student borrowers.

Throughout the Obama Administration we’ve worked to ensure student borrowers are protected and have worked across agencies in doing so. For example, the Department of Education has convened an interagency Joint Task Force on the Oversight and Accountability of For-Profit Institutions. The Federal Trade Commission (FTC) and the Consumer Financial Protection Bureau (CFPB) have been active in looking at possible deceptive practices in the debt-relief business.

The extent of the problem with debt relief companies is demonstrated by numerous legal actions around the country. In January of 2014, the New York Student Protection Unit issued subpoenas to 13 student debt relief companies as part of an investigation into concerns about potentially misleading advertising, improper fees, and other consumer protection problems in that industry. Over the past two years, the Florida, Illinois and Minnesota Attorneys General all took separate actions against firms found to have misled borrowers. A number of states and our enforcement partners are stepping up to help protect borrowers, but the first line of defense is making sure you know your rights.

We’re making it easier to distinguish between Department sites and private companies’ pages to make sure students and families aren’t mistakenly lured into paying for services available for free. For instance, last year we reached a settlement with a company to obtain a web address it was using — — to market its for-profit service charging students to fill out the Free Application for Federal Student Aid (FAFSA). This settlement reduced confusion among students and parents who may have thought they were using a federal website rather than a commercial one. We also trademarked many of our forms’ names and taglines.

We are strengthening our internal systems to ensure continued protection of students’ information. For instance, under the new FSA ID, there is a delay for borrowers trying to recover their password to ensure that third-party companies are not inappropriately accessing peoples’ accounts.

Always remember: Keep your FSA ID private and think twice before signing on to pay for a service you can get for free. Sharing your FSA ID puts you at risk.

If you think that you’ve been scammed then learn your options. Many state governments have an Office of Consumer Affairs or Consumer Protection either within or affiliated with, the Office of the state’s Attorney General. At the federal level, the FTC and the CFPB have the authority to act against companies that engage in deceptive or unfair practices. Click on the links to file your complaint with either of those agencies; or you can call the CFPB at 1–855–411–2372.

Ted Mitchell is U.S. Under Secretary of Education.


  1. Co signed loans with sallie may for my son now he thinks they will go away if he does not pay for fours years. What should I do.

  2. Don’t have 3 references do for 4 years Performant has refused to take payments and help with plan. I am sick over this?

  3. I am having difficulty still in making my payments on my student loan. I tried applying for the economic hardship on line, but I could not download this specific document. The rest of the documents, I had no problem.

    Also, I would like to see if I can try applying for a loan forgiveness since I am teacher in a HUB zone area and in a school where there is financial challenges among most of them. Please let me know if I can also apply for teacher forgiveness as well. Any assistance will be greatly appreciated.

    Thank you for your time and hope to hear some great news and assistance in getting an attach “Economic Hardship” form so I can start.

  4. thanks so much for pointing me in the right direction…my wife and i put two kids through college figuring my 401k money could be used to pay the loans but its way too much. i dont mind paying but the taxes on the withdraws are real killers

  5. The US Department of Education is a predatory lender. Not only do they book $50 BILLION per year on the lending program, they ALSO have been profiting heavily on defaults for many years.

    Shame on the Department of Education for abandoning their public purpose. Shame on the Department of Education and its contractors for fighting tooth and nail AGAINST the return of the Constitutionally mandated bankruptcy protections that exist for EVERY OTHER TYPE OF LOAN IN THIS COUNTRY.

    Shame on you people. You will all be held to account for the massive swath of economic destruction you have created across this country, for the millions families you have ruined, and for the millions of people you are poised to ruin.

  6. I am in financial trouble with Navient. However, I no more deferments, forebearance, and I am not eligible for REPAYE programs. My lender has suggested that I apply for income sensitive repayment program. I am retired from the military and on social security, my wife is part timer. My question to you is when I fill out the application, they used the AGI formula. can I fill out the application myself or jointly with the wife. Thanks

    • What application are you referring to? Is it the Income-Driven Repayment Plan Request? Also, REPAYE is just one of several repayment plans we offer. There are other plans that you may be eligible for:

      If you’re completing the IDR Plan Request, the information you provide is about yourself. There are questions about whether or not you have a spouse and their financial information. However, keep in mind that this application is specifically for YOU and YOUR student loans. Not for you and your spouse combined.

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