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Americans owe over one trillion dollars in student loan debt, with the average student holding about $30,000.  Unfortunately, individuals struggling with their debts are often preyed on scammers looking to make easy money by offering promises of loan consolidation or assistance with repayment.

How this scam works: Consumers looking for debt relief solutions for their federal student loans often come across businesses claiming to specialize in helping reduce their clients monthly repayments by enrolling them in government programs. The borrower generally agrees to an upfront payment and then monthly payments of a set amount for a set period of time and the company handles the rest. Many of the companies also require their clients to sign documents prohibiting them from contacting their loan servicers. The problem with this arrangement: it’s something consumers can already do, and for free.

Here are some guidelines to help you avoid these loan relief scams:

  • If you’re having trouble repaying your loans, talk with your lender first. You may have options such as deferring payments or decreasing the payment amount.
  • Consumers with multiple federal education loans can apply to consolidate those loans into one loan. There is no fee to do so and consumers can apply right on the U.S. Department of Education’s website.
  • Consumers that are considering paying for student loan relief should ask questions before signing up. If the company does not want to answer questions, it’s a red flag.
  • Look for reviews and complaints against these companies using the Better Business Bureau website or other trustworthy sources.
  • If the company promises to provide immediate relief, run the other way. Student debt relief companies advertise that they can get your loans forgiven immediately. Loan forgiveness doesn’t happen automatically!
  • If it’s being advertised on Facebook or at the top of search results, view them with skepticism. Companies that pay to advertise their services means they’re in business for profit and often mislead consumers to pay for services that are otherwise free.


If you have additional questions, contact the Office of Consumer Affairs and Business Regulation by calling our Consumer Hotline at (617) 973-8787, or toll-free in MA at (888) 283-3757, Monday through Friday, from 9 am-4:30 pm. Follow the Office on Facebook and Twitter, @Mass_Consumer. The Baker-Polito Administration’s Office of Consumer Affairs and Business Regulation along with its five agencies work together to achieve two goals: to protect and empower consumers through advocacy and education, and to ensure a fair playing field for all Massachusetts businesses. The Office also oversees the state’s Lemon Laws, data breach reporting, Home Improvement Contractor Program and the state’s Do Not Call Registry.


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