How To Identify Potential Student Loan Scams

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Piglet with eyes wide open

Piglet always has her eyes open for potential scams.

Helping people understand student loans is our job at SALT™, and few are better at it than Betsy Mayotte—the director of regulatory compliance for American Student Assistance® (our parent company). We told borrowers to “Just Ask” her questions, so check out her answers below (as well as her cat—because if Piglet can’t make student loans better, what can?).


My husband recently fell victim to one of those sketchy loan reduction companies. He was out a bit of money but had some of the fee returned and is monitoring his credit report.

This week, he was contacted by someone supposedly from the Department of Education who was investigating fraud by that company. Apparently, [the company] applied for a loan using my husband’s name for $250,000.

This agent claimed my husband is on the hook for felony charges relating to this loan and said a cop will come by to take him in for questioning. The official has given us his name; is a way to look up officials online to help clarify the legitimacy?

I think this sounds ridiculous. Why would my husband be in trouble when he is, in fact, a victim? We have received nothing in the mail. This has all taken place over the phone.

The “official” hasn’t asked for money or personal information.

I just can’t figure out what the scam is or is this legitimate.

Piglet thought this smelled very very bad, so she reached out to this user and received some additional information, including the name given by the supposed Department of Education official. We checked it out against the employee locator at the Department of Education’s (ED) website and found no results.

As most, but not all, ED employees are listed there, we sent the information, including the name, directly to a management-level ED employee and confirmed there was no one by that name working there. Now, we knew it was bad and were very troubled by the thought that someone was trying to take advantage of someone who had already been taken advantage of.

While ED was already looking into it based on our inquiry, we also advised the user to contact the Department of Education’s Office of the Inspector General (OIG), which is ED’s enforcement arm, and they are working on this together now. Happy ending in that the consumer didn’t get scammed again, but we thought it was a good opportunity to remind the rest of our readers that these predators are out there.

Here are some tips to help you weed out the bad guys:

1. Federal student loans are heavily regulated. There is not a person on the planet that can get you a lower payment, access to a loan forgiveness program, or resolve your default that you can’t get yourself—for free—by working directly with your loan holder and/or another free service such as SALT™. If the person or company promises otherwise, it’s probably a scam.

2. Watch the logos and company names. We’ve seen quite a few companies pop up with names and logos that are very very similar to ED’s. While that alone doesn’t make them a scam, the fact that they are trying to trick you into thinking they are a federal agency should be a big warning sign. If you aren’t sure, check them out at or you can even Just Ask SALT. We’re probably not going to be able to tell you if it’s a scam or not, but we can confirm whether it’s a federal agency or a legitimate vendor hired by ED.

3. Don’t ever give personal information over the phone. If the company really holds your loans, they will have your Social Security number already. They may ask you to confirm that information for security purposes, but if you aren’t sure the caller is really from your loan holder, hang up and call the number on your bill. Never give out your NSLDS® PIN – this is the key to the kingdom of your personal and student loan information.

4. A fraud investigator isn’t likely to call to tell you that a police officer is on their way to arrest you. If you should get a call from someone claiming to be law enforcement, and you have reason to suspect it may be a scammer, don’t give them any information. Instead, check out the Federal Trade Commission’s tips on identifying and handling phone fraud

Have a student loan question you need an answer to? Just Ask.

(Note: The questions and answers above are real; however, they have been edited for grammar and clarity, but not by Piglet.)

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