LOS ANGELES – As students prepare to enroll in college this year and take out loans to pay for higher education, Attorney General Kamala D. Harris issued the following tips, encouraging Californians to know all the facts—and avoid potentially harmful scams—before taking on or paying off substantial student loans.
In advance of enrolling in a college or university, students should thoroughly research the types of financial aid they may qualify for and determine which loans, scholarships, grants, or work-study programs would be most beneficial to their personal situation. Student borrowers should be aware of factors that may impact their ability to repay student loans, such as changing the status of student enrollment, future job prospects, the amount of interest accruing on loans, and any loan prepayment penalties.
Students should also be cautious of private companies that charge for what would normally be free student loan services. Certain companies may impose fees for assisting with federal student loan consolidation or in submitting the Free Application for Federal Student Aid (FAFSA), without disclosing that such services are actually free. Student borrowers are strongly encouraged to use free student loan resources to avoid being charged unfair and unnecessary fees.
Consumers who take on student loans should be sure to make their payments on time. Contact the student loan servicer promptly to discuss options if repayment of loans becomes difficult. Eligible borrowers may be able to lower monthly payments or may be eligible for loan deferment, forbearance, or cancellation. Late payments could adversely affect credit scores and harm future ability to make purchases or qualify for additional credit.
What to look out for
The Attorney General offers student borrowers the following tips in order to educate themselves and take advantage of resources regarding student loans:
The U.S. Department of Education provides information on the types of federal aid available to students. The website includes basic eligibility requirements for federal aid. Additionally, the FAFSA4caster assists consumers with calculating the amount of federal student aid for which they are eligible.
The U.S. Department of Education offers a comparison of federal student loans and private student loans.
The Federal Student Aid website also helps student borrowers learn about federal loan consolidation before applying for consolidation. Students who have questions regarding the loan consolidation process can contact the Loan Consolidation Information Call Center at (800) 557-7392.
Finally, the Federal Student Aid website has information on scholarship opportunities that may help students fund their educational goals.
What to do if you are the victim of a STUDENT LOAN scam
The Office of the Inspector General at the U.S. Department of Education investigates education programs and collects complaints regarding fraud or schemes related to the misuse of federal student aid. If you are the victim of a student financial aid scam, please contact the Office of Inspector General’s hotline.
The California Department of Justice protects the rights of consumers and collects complaints on student loan scams in order to identify patterns of wrongful activity. To submit a complaint to the California Department of Justice regarding a student loan scam, please use one of the following complaint forms: