What are student loan debt relief companies?

Student loan debt relief companies are private companies that provide (or claim to provide) student loan management services for a fee. Often these companies are charging for services you can easily manage yourself. They will say they can help reduce your monthly payment or get your loans forgiven, but after you pay, you might be worse off. You might not get the promised help or your money back, and the company may have made changes to your loan repayment plan that you didn’t authorize or want. If you stopped paying your loans, your credit could be damaged and your loan balances could balloon.

The tricky part is that, although these companies are not affiliated with ED, they sometimes claim to be. In their communications, these companies will claim to “work with the U.S. Department of Education” or claim to be “consumer advocacy groups.” Remember: ED and our federal loan servicers will never charge fees to help borrowers with their student loans. If you’re asked to pay an up-front or maintenance fee, you’re not dealing with ED, so do not share your information.

How do student loan debt relief companies target federal student loan borrowers?

Some borrowers have reported receiving phone calls, emails, letters, and/or texts offering them relief from their federal student loans. Student loan debt relief companies have also aggressively advertised on TV, online, in print, and through various other channels. In an effort to appear legitimate, some of these companies may even include your loan balance information in their communications. Always be sure to verify the source. If the communication didn’t come from ED or one of our partners, it should not be trusted.

Is there a list of student loan debt relief companies that the government has taken action against?

The Federal Trade Commission (FTC) and other government entities have taken action against many of these companies. View the FTC’s list of companies and people banned from debt relief.

The problem is, many student loan debt relief companies operate under many different names and use many different phone numbers to avoid detection. Some even go as far as to reopen under different names after being sued or shut down. That’s why it’s important that you consult the list of trusted partners, and take steps to avoid these scams.

Are there legitimate private companies that ED works with?

Yes. There are private companies (lenders, servicers, and private collection agencies) that work on behalf of ED.

ED contracts with loan servicers who handle the billing and other services on your federal student loans. Your federal loan servicer will work with you on repayment plans and loan consolidation and will assist you with other tasks related to your federal student loan. If you’re not sure who your loan servicer is, log in to “My Federal Student Aid” to find contact information for the loan servicer or lender for your federal student loans.

ED also works with private collection agencies (PCAs) to get federal student loan borrowers out of default and ensure defaulted borrowers are aware of their options. If you’re in default, please contact ED’s Default Resolution Group for personalized assistance at 1-800-621-3115.

These lenders, servicers, and PCAs are affiliated with ED and can be trusted, so you should contact them if you need assistance.

Where can I go for free help?

If you have questions or need help with your student loans, contact your loan servicer or lender for FREE assistance.