New York Attorney General Letitia James Provides Tips to Borrowers as Federal Student Loan Payments Resume

AG JAMES ALSO WARNS BORROWERS OF STUDENT LOAN SCAMMERS

NEW YORK – New York Attorney General Letitia James today provided tips to New York borrowers on how to manage their federal student loans when payments resume in October. Federal student loan interest accrual resumed this month and payments will be due in October 2023. Attorney General James also urged New Yorkers to be cautious of scammers posing as student loan servicers who can take advantage of borrowers.

“With federal student loan payments resuming in October, there is a lot of anxiety and confusion from students, borrowers, and families,” said Attorney General James. “To help address this situation, I encourage New Yorkers to follow these tips to better manage their federal student loans and take advantage of programs meant to alleviate the burdens of student debt. I also urge borrowers to be wary of scammers claiming to help relieve student debt. Anyone who believes they have been a victim of a student debt relief scam should contact my office immediately.”

Attorney General James urged New Yorkers to take the following steps to be in the best position to manage their public federal student loan repayments:

Make sure your contact information is updated on your loan servicer’s website.
- Be aware that some student loans have switched to new servicers during the payment pause. If you’re not sure who your servicer is, visit the U.S. Department of Education’s (DOE) Federal Student Aid (FSA) website for more information.
Update or set up your FSA account.
- Studentaid.gov is the DOE website for federal student loans, and you can access information about your federal student loans as well as apply for repayment plans, consolidation of your federal student loans, and find further information on repayment. If you don’t have an account, you can apply for an FSA ID online.
Get an estimate of your upcoming payment amount, interest rate, and due date from your loan servicer.
- While you will receive a billing statement at least 21 days before your payment is due, you should contact your loan servicer online or by phone to get an estimate of your upcoming payment amount, which may have changed since you last paid.
- Your interest rate may have also changed if, for instance, you consolidated your loans.
Check out DOE’s Loan Simulator to review your repayment plan options.
Check if you are eligible for the Biden Administration’s new SAVE Plan. The repayment plan will cut monthly payments to $0 for millions of borrowers making $32,800 or less, or $67,500 for a family of four, and save all other borrowers at least $1,000 per year. Borrowers who are already signed up for the current Revised Pay as You Earn (REPAYE) plan will be automatically enrolled in the SAVE plan. More information on the SAVE Plan can be found on FSA’s website.
Research an Income-Driven Repayment (IDR) Plan if you believe that your payments will be too high.
- IDR plans can help provide a lower monthly payment amount depending on your income and family size. Depending on your circumstances, IDR payments can be as low as $0.
- More information on IDR Plans can be found online on FSA’s website.
Sign up for auto-debit payments.
- Auto-debit payments mean your student loan bill is paid automatically from your bank account, helping ensure you never miss a payment. If you have Direct Loans, you may also get a 0.25% interest rate reduction if you sign up for auto-debit.
- For many borrowers, auto-debit payments will NOT restart automatically and most borrowers will need to confirm their auto-debit enrollment by opting-in even if they were previously signed up for auto-debit. More information can be found online on FSA’s website.

To check if your loans are public or private, visit FSA’s online page about the difference between public and private loans or call 1-800-4-FED-AID.

Attorney General James also warned federal student borrowers of scammers who could try to take advantage of confusion during this period to prey on borrowers. Attorney General James offers student borrowers the following tips to avoid scammers:

The DOE and loan servicers will not be calling you by phone and will not be asking you for your social security number.
- Do not give your personal information, including your FSA ID username or password, over the phone or internet unless you initiated the contact.
Beware of companies that promise to help you manage or reduce your student loan repayment for a fee. Many of these companies are charging fees for services that your federal loan servicer provides for free or that you can complete on your own.
Other signs of a debt relief scammer:
- Note: repayment levels are set by law and debt relief companies do not have the ability to negotiate a “special deal” for federal loan repayment.
- Note: no company working with the government or a loan servicer would charge you money to consolidate loans or to enroll in an alternative repayment plan.
- Involves outreach that you did not initiate;
- Promises immediate loan forgiveness or debt cancellation;
- Charges you fees before it actually does anything for you or charges recurring monthly fees;
- Pressures you to sign a contract on the spot;
- Requires you to finance your fees through another company;
- Offers to contact your creditor to obtain a “special deal” in connection with a federal loan;
- Pressures you to sign a “third party authorization” or “power of attorney”;
- Tells you it is working with the federal government or a loan servicer.
More information on protecting yourself from student loan scams can be found on the Office of the Attorney General’s (OAG) website and on DOE’s website.

Any New Yorker who believes they have been a victim of a student debt relief scam should contact OAG by calling 1-800-771-7755 or filing a complaint online.