Crime - Sacto 911

State warns of federal student loan consolidation scams

California Attorney General Kamala Harris has issued a consumer alert in connection with Californians being victimized by student loan consolidation scams.

Harris said the Attorney General’s Public Inquiry Unit has received an increased number of complaints of private companies charging upfront or monthly fees for what are free federal loan benefits.

The attorney general said the companies may claim to have a special relationship with the Department of Education, or they may claim that a special governmental loan consolidation program will be ending soon.

Harris said consolidating federal student loans is free and can only be done through the Federal Direct Consolidation Program. Private education loans are not eligible for the program.

Applying for such a loan can be done online at studentaid.ed.gov/sa/repay-loans/consolidation.

Complaints about a possible scam can be reported to the attorney general’s office or to the Consumer Financial Protection Bureau at consumerfinance.gov/complaint.

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