College students generic student loan graduation

FILE- In this May 17, 2018, file photo, new graduates line up before the start of the Bergen Community College commencement at MetLife Stadium in East Rutherford, N.J. (AP Photo/Seth Wenig, File)

LOUISVILLE, Ky. (WDRB) -- Kentucky's governor is issuing a warning for anyone who owes money on federal student loans.

Gov. Andy Beshear and the Kentucky Higher Education Assistance Authority (KHEAA) say some loan repayment companies scam students by charging them for services available for free — like document preparation — to lower their payments, according to a news release from the governor's office.

Beshear said borrowers should be skeptical of third-party companies that claim they offer services to help students qualify for a loan forgiveness program. They may ask for payment and personal information up front, and some companies may ask for monthly fees to monitor an account, promise immediate loan forgiveness or ask for a student's FSA ID password and a power of attorney.

According to the Federal Trade Commission (FTC), it is illegal for companies to charge upfront fees before providing services such as debt relief.  

If you think you've been contacted by a scammer, you should report it to the Consumer Financial Protection Bureau and the Kentucky Attorney General's Office.

The Federal Student Aid Office offers additional tips to spot student loan scams, here, as well as tips to avoid being scammed, here.

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