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(Direct Loans) Subject: Third-Party Debt Relief Company Use of Phone Number Formerly Assigned to the Direct Loan Servicing Center

Posted Date:December 19, 2016

Author: Jeff Baker, Director, Policy Liaison and Implementation, Federal Student Aid

Subject: Third-Party Debt Relief Company Use of Phone Number Formerly Assigned to the Direct Loan Servicing Center

As we reminded institutions in an Electronic Announcement dated March 30, 2016, there are some third-party “debt relief companies” that charge borrowers large up-front or monthly fees for Federal student aid services offered by the Department of Education and its student loan servicers for free. It appears that one such debt relief company has purchased, and may be using, the following toll-free phone number that was previously assigned to the Department’s former Direct Loan Servicing Center (ACS).


As you are aware from previous communications, the former Direct Loan Servicing Center is no longer operational. We offered to purchase the Direct Loan Servicing Center’s toll-free number so that it could not be used by other entities, but that offer was rejected.

The result of an internet search we conducted showed that some of our Title IV participating institutions continue to provide contact information for the old Direct Loan Servicing Center, including the now invalid toll-free phone number, thus directing their students not to a legitimate Federal loan servicer, but to a private debt relief company. We also found that some institutional websites include not only the incorrect phone number, but also other information that is outdated—sometimes significantly out of date. This information includes outdated interest rates and incorrect loan repayment plan descriptions.

To avoid being an unwitting aid to third-party debt relief companies and to avoid providing inaccurate information, we urgently request that each institution conduct a thorough review of its websites to determine whether it is providing the incorrect phone number and whether other updates to the institution’s website must be made to ensure currency and accuracy. Borrowers can find the correct toll-free phone number for their servicer by going to the website.

Institutions, students, and borrowers can file a complaint or report suspicious activity through the Federal Student Aid Feedback System for concerns related to third party debt relief companies. Issues can include information that a debt relief company is inappropriately using the Department of Education's or your institution’s logo or other identifying information to give the impression that they were working with or for the government or your institution.

We thank you for your cooperation in ensuring that students are not misled by third-party debt relief companies.

Last Modified: 12/18/2016