Attorney General James Warns New Yorkers About Student Loan Scams

September 2, 2026

NEW YORK - New York Attorney General Letitia James today issued a consumer alert warning New Yorkers of scammers exploiting recent changes to federal student loan programs to take advantage of borrowers seeking affordable payment options and financial relief. The Trump administration's changes to student loan repayment programs, including eliminating the Saving on a Valuable Education (SAVE) payment plan and phasing out existing income-based plans, have created significant confusion about current repayment rules. Fraudsters are taking advantage of these recent changes to loan programs, leading to new scams targeting student loan borrowers. Attorney General James is providing tips for borrowers to protect their finances and encouraging New Yorkers to report student loan scams to the Office of the Attorney General (OAG).

"Student loans are already a burden, and the federal administration's changes to loan repayment programs are making it even harder for borrowers to manage their finances," said Attorney General James. "Now scammers are exploiting the confusion about new student loan plans to prey on borrowers. I encourage New Yorkers to follow our tips to avoid these scams and report any fraudulent practices to my office."

Attorney General James urges New Yorkers to follow these tips to protect themselves:

• Remember that federal student loan programs do not cost money. Offers that promise to help with your loans for a fee can be misleading.
• Be suspicious of unsolicited telephone calls and emails or any online ads that promise complete loan forgiveness or the elimination of debt within a short period of time. No person or private company can make these types of guarantees. If it sounds too good to be true, it likely is.
• Do not trust companies that create a sense of urgency by claiming that you must act within a very short period of time to obtain student loan relief. Student loan programs do not work this way.
• Do not sign a power of attorney naming someone you do not know and trust. Student loan programs do not need your power of attorney to provide payment relief or enroll you in a payment plan.
• Be wary of any company that claims affiliation with the federal government.
• Never give your Federal Student Aid identification or login credentials to anyone. The Department of Education or the loan servicer for your loan will never ask you for your login credentials. Providing this sensitive information can allow scammers to gain access to your account and change your settings and personal information.
• Do not pay any upfront fees to a company that solicits you for student-loan-related services. It is a violation of New York law to charge upfront fees for such services and violations should be reported to OAG.
• Use vetted websites and organizations to get information about loan repayment programs, including:
  • The OAG's Student Lending Guide;
  • The Education Debt Consumer Assistance Program (EDCAP), which consumers can contact by phone at 888-614-5004 or by email at [email protected]; or
  • The National Consumer Law Center's Student Loan Borrower Assistance Project.