You may have seen news this year about Operation Game of Loans, a crackdown by the Federal Trade Commission and 11 state attorneys general on student debt relief scams. Dozens of bad actors are accused of having collected close to $100 million in bogus fees that were marketed to student loan debtors as debt relief programs. In addition, they often falsely promised to help reduce or eliminate student loan debt and misrepresented themselves as affiliated with the Department of Education or other government agencies.

According to the FTC, organizations that had focused on credit card debt relief began to pivot towards student loan debtors about five years ago. The combination of confusing requirements for federal loan relief programs and insufficient or incorrect information from student loan servicers has left many borrowers vulnerable to scams.

Often, scammers charge upfront fees to assist with debt repayment or ask for a borrower’s FSA ID. In many cases, borrowers were charged a fee to enroll in free, federal government programs; told that monthly fees were being credited towards student loans when they were not; or transferred out of federal loan programs to private ones.

According to the FTC, assistance with unsecured debt such as student loans falls under the Telemarketing Sales Rule (TSR) which specifically prohibits taking upfront fees. It also prohibits misrepresenting the services or results consumers can expect from working with the service provider.


How do you recognize a scammer? Any request for an upfront fee should be an immediate red flag. And regardless of the purpose, anyone requesting your FSA ID is most likely up to no good.

Those looking for information on loan repayment are better off visiting The FTC has additional information on its website, too.