Don’t fall for Student Loan Scams

10News Today

'Don't fall for this'
Scammers targeting millions of federal student loan borrowers

More than 42 million people hold federal student loans owing more than $3 trillion to the government.

Author: Aaron Velasquez

Published: 6:59 AM EDT May 13, 2025

KNOXVILLE, Tenn. — In late April, the federal government announced it would resume collections on the millions of people who hold federal student loans. This created a big target for scammers who attempted to take advantage of the situation. 

I am one of those students, and since the announcement, I've received more than 25 scam calls. 

"What the scammers do - is there's over $3 trillion sitting there - and they want to get their hands on that and take advantage of the people that owe that money," CEO of Federal Solutions Support Eric Steffy said. 

He said scammers will impersonate federal agencies like the IRS or use names that sound similar, like the "approval department."

He added that scammers are utilizing AI technologies to make their schemes sound more believable. 

"Because of AI, scammers have huge doors that have been opened up that they can come after , so that it sounds like a real person I'm talking to," Steffy said. 

The biggest advice our financial expert shares is to block callers and make a plan directly with your loan provider, so you know any other calls are scams.

"If you have a student or somebody that has a student loan, have children or grandchildren, you need to let them know; don't fall for this," Steffy said. 

To learn more about paying back your student loans, you can visit studentaid.gov.

Tips from FederalSolutions.Expert

1. Don’t pay for services that are free: your loan sponsor (government and private will not charge you to set up a payment plan, consolidate your loans or apply for loan forgiveness. These are free services. Don’t be fooled by scammers who want you to pay for what is free.
   

2. Legitimate loan officers won’t pressure you to act quickly “or else.” Unlike scammers, loan officers want you to make a decision that’s right for you - without scare-tactics. If it sounds like you’ll be in big-trouble if you don’t act now, hang-up and contact your loan officer directly.

3. Never, ever give out personal information like your Social Security Number, Bank Account details, birthdate. If the caller tells you they need your information to stop a fraud or complete required paperwork - hang up.

4. Hang-up. Block the caller. And go to one of these two Government websites (or directly to your bank if you have a private loan): https://studentaid.gov/ or https://studentaid.gov/manage-loans/default/get-out

FOX23 | Chicago
CEO Eric Steffy

How cuts to the Consumer Financial Protection Bureau affect You

Kudos to every Federal Employee who has worked hard to help American consumers facing fraud or unfair business practices! But, overreach by the Consumer Financial Protection Bureau (created to help consumers) has unintentionally created rules that penalize consumers. It's time to let this unregulated and underperforming franchise go,” Eric Steffy, CEO.