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News Release – Thursday, October 3, 2024
IDFPR & Illinois Attorney General Warn of New Scam Targeting Student Loan Borrowers
CHICAGO – The Illinois Department of Financial and Professional Regulation (IDFPR) Division of Banking and Illinois Attorney General Kwame Raoul today issued a warning for a new scam that seeks to take advantage of student loan uncertainty. Scammers contact student loan borrowers and make false promises that they can guarantee lower monthly payments or loan forgiveness, often demanding upfront fees to do so and promising immediate results. Borrowers typically can request these services for free from the U.S. Department of Education or their student loan servicer. Scammers utilizing this scheme are known to have contacted targets by phone, text, email, and regular mail, and may falsely claim to have ties to government agencies (including the Department of Education). While a few companies may offer legitimate student debt relief services, many make false promises to student loan borrowers and fail to deliver on the services they’re paid for.
“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. “Borrowers should get their information from the Department of Education or their student loan servicer, so they do not put themselves at risk of potential scams. I also encourage borrowers who have questions or concerns to contact my office. I will continue to advocate in support of students and will work to hold institutions that defraud students accountable.”
“It is disheartening to learn of yet another scam targeting uncertain financial situations, but borrowers should take heart in knowing there are steps they can take to avoid falling victim,” said IDFPR Secretary Mario Treto, Jr. “Remember, you do not need to pay for student loan assistance. Borrowers should contact their loan servicer or the U.S. Department of Education to get the help you need.”