PHEAA Urges Caution as Millions of Borrowers are Targeted by Misleading Solicitations

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Beware of deceptive student loan debt relief offers that could put borrowers deeper in debt

Harrisburg, PA (September 11, 2014)—The Pennsylvania Higher Education Assistance Agency (PHEAA) is urging student loan borrowers to be extremely cautious if solicited by any company offering student loan debt relief, such as through loan consolidation, loan cancellation, loan forgiveness, or defaulted loan assistance.

"Millions of unsuspecting borrowers are being aggressively targeted by deceptive offers of assistance," said Representative William Adolph, PHEAA Board Chairman. "For anyone struggling to make ends meet, it can be difficult to resist what might seem like a legitimate opportunity. But make no mistake – these are predatory solicitations that seek to take advantage of those who can least afford to be tricked into paying money unnecessarily."

These companies typically charge significant upfront fees for services - sometimes through non-existing programs - that are readily available for free from the federal government. Before paying for any assistance related to student loan management or debt relief, borrowers should contact the servicer of their loans to learn what options are available and receive assistance in determining which option is best for them.

Student loan debt is a serious and growing problem. The Consumer Financial Protection Bureau (CFPB) estimates that 40 million borrowers owe a record $1.2 trillion nationally. The average student loan debt in Pennsylvania for a 4-year degree program currently exceeds $31,000, which ranks among the highest in the nation.

"With so many people feeling overwhelmed by student loan debt, it is no wonder that unscrupulous companies are trying to take advantage of borrowers with expensive scams and worthless services," said State Senator Wayne D. Fontana, PHEAA Board Vice Chairman.

PHEAA offers the following advice:

Research your options.

  • Do your homework. Always begin with free options and be suspicious of any company that charges a fee or requires payment in advance.
  • Learn about the many repayment options available, including Income-Based, Pay as You Earn, Graduated, and Extended Fixed Repayment plans. Information on repayment plans, including their potential for loan forgiveness, can be found at
  • PHEAA's offers free advice on student loan repayment and debt management options, as well as career development and household budgeting.
  • For college-bound students and their parents, PHEAA's is available to help them make informed decisions early in the college planning process to ensure that any future college debt is properly anticipated, understood and manageable.

Avoid paying fees for any service that is free.

  • Borrowers can easily apply for federal student loan consolidation at To learn if consolidation is right for you, visit the simple-to-use Loan Consolidation Estimator at
  • Federal student loan borrowers who are employed in a public service career may be eligible for loan forgiveness. The free application for this program is available at
  • Borrower support and other information is available from your loan servicer. At the first sign of difficulty repaying a loan, the loan servicer should be your most immediate point of contact for assistance. If you are not aware of the name of you federal servicer, you can log in to the National Student Loan Data System to make this determination by visiting

Protect your private information.

  • Never provide your federal student loan Personal Identification Number (PIN), password or Social Security Number to a third party.
  • Do not sign a power of attorney authorizing anyone to act on your behalf, which still leaves you legally responsible for any loan obligation that may be incurred.
  • Any personal information shared with an untrusted third party could be used to commit fraud or identity theft.

If you believe that you have been targeted or victimized by a scam, complain to the Consumer Financial Protection Bureau (CFPB) or the Federal Trade Commission (FTC).