So, You Fell For A Student Loan Scam

The following is an updated version of my 2021 blog post “I Fell For A Student Loan Scam.” I wanted to include more helpful advice on what do afterwards.

Tell me if this applies to you. You graduate from college and you need to get around to paying off your student loans. You’ve taken out so many loans that paying for each one individually would be too much of a hassle. So you opt instead to consolidate them. You apply for consolidation and wait to hear back, but while you’re waiting, you receive a phone call about getting your loans consolidated. You assume that they’re with the Department of Education. They sound professional enough and tell you that they need around $800 up front to consolidate your loans. They ask for a lot of personal bank and identity info. Then they say that to continue to keep your loans consolidated, you have to pay a fee of around $40 a month. You only learn later, when contacting the actual Department of Education, that none of this was necessary as student loans can be consolidated for free!

The specific company I fell for called itself Amerifed Doc Prep, though I imagine that they also had a number of different names. I knew that I needed to contact them for a refund, but getting a hold of them was a pain. Amerifed did eventually get back to me and I gave them a piece of my mind. They told me that the $40 I paid every month was to help them consolidate the loans (whatever that meant). When I told them that consolidation could be done for free, they presented themselves as no different than H&R Block, which was, of course, a false equivalence. The IRS, after all, won’t file your taxes for you free of charge. When I demanded a refund, they refused. Nice people.

I learned a lesson from that experience. An expensive lesson, but a valuable lesson all the same. These sorts of scams are unfortunately rather common in the country, and not enough is done about them. If you, reading this, have fallen for this or a similar study loan scam, here are some pointers to help you through it:

1. Don’t blame yourself.

Getting scammed can happen to anyone. Yes, even you. We’d all like to believe that we’re too intelligent to get fooled, but humans are not machines. We can make foolish decisions in stressed situations. People make mistakes and you’ve learned a very expensive lesson. Of course, feeling angry at yourself is a natural response, but don’t wallow in it. Many are so embarrassed by being fooled that they refuse to act, because acting would mean acknowledging they were scammed. Don’t let your pride get in the way of a solution.

2. Don’t panic

Aside from guilt, another feeling that gets in the way of concrete action is panic. Realizing that a lot of your money is gone and that a lot of your personal information has been compromised is a scary thing, but panic will immobilize you and cause you to make more irrational decisions. Take a deep breath and let all your emotions of anger, shock, and sadness run through you. Wait until your mind is clear, then pick yourself up and get to work.

3. Get in touch with your bank to cancel future payments and alert their fraud department.

The first people you’re going to want to contact are your bank. You’ve given away valuable information about your bank account. So you’ll need their help to cancel future payments and keep your money safe. You may also need to order new credit and debit cards.

Every bank is different, but my bank used a third party fraud department. In terms of refunds, they weren’t really helpful. Since I voluntarily gave my money and information to this company, they technically couldn’t count it as fraud. The fact that I gave such information under deceptive circumstances didn’t seem to matter to them. It seems apparent to me that our fraud laws need to be updated to take this type of deception into account.

4. Try and contact the offending company for a refund

Yeah, this is unlikely to work, but it’s still worth a shot. Most of these companies have signed agreements where the window for getting a refund is very short, but if you’re lucky you might be able to catch them in time. Even if you are outside their window, annoying them into capitulation is worth trying.

5. Write a review of the company for the Better Business Bureau and other such review sites.

Reviews might seem a small thing, but they matter. When people hear of a company, they tend to look them up. Had I done this, I probably wouldn't have ended up in as much trouble as I did. The Better Business Bureau is a respected and reliable resource for sniffing out sketchy companies. Placing a negative review helps spread the word about the group's bad reputation, helping others, and making it harder for them to work without scrutiny. Though be warned that these groups will hire folks to write up positive reviews for them, which makes it all the more important that you counter their attempts to whitewash their image.

6. Warn friends and family who are either going to college or are college graduates

You don't want your friends and family to be swindled as well, do you? Warn them! I honestly wish that I had been given fair warning on this matter in college. Maybe things have changed since I graduated, but don't assume that they'll get this information there. Warn them of what to watch out for when they graduate.

7. Get in touch with the local media

Again, the best way to fight back is to spread the word, and there's no greater loudspeaker than the media. I myself found success with this method, and did an interview with NBC where I laid out my experience for the nation to hear. It was a little embarrassing to admit that I'd made such a huge mistake, but I knew that by telling my story I would save others from sharing my shame. Please think about doing the same.

8. Contact your local congressperson for help.

Congress has a lot of problems, but honestly, reaching out to your local representative could do some good for you. For one, they have a platform which can bring attention to these abuses on a national level. Secondly, they have the potential to act on these matters. Either by enacting laws, calling for legal investigations, or putting pressure on the abusive organizations in question. You might think to yourself, what good will this do? Congress never listens, right?

Well, in 2021 some did. California's government found that over 1,000 of its college residents had paid into the Amerifed Doc Prep scam, so its Department of Financial Protection and Innovation ordered the company to pay penalties and refunds of more than $1.37 million. This was a good thing the government did in response to its constituents, but the reimbursement was only made to Californians. Americans elsewhere who suffered from this scam have yet to be compensated. There is still so much work to do, but this was a good step forward which proves that governments can respond if we make enough of our voices heard.

9. Support the restoration of the Consumer Financial Protection Bureau (CFPB).

Under normal circumstances, I would say contact the CFPB to help with this issue, as they were founded precisely to protect consumers from this type of fraud. Since its founding in 2011, the CFPB has successfully reimbursed $21 billion back to consumers who suffered from banks, predatory lenders, credit card companies, and other such scams. I must confess that the CFPB was not the most helpful to me when I contacted them about this matter. The complaint was probably sent into a file that wouldn't be looked at or acted upon until more complaints arrived or the fraud laws were updated. It goes without saying that I did not see the CFPB as a perfect organization. It certainly could've been more forceful and speedy against student loan scams. That said, I'd rather the institution be improved on instead of abolished altogether. We can work with an institution that functions, but we can't work with an institution that does not.

The Second Trump Administration, in particular, the billionaire menace Elon Musk, subjected the CFPB to the DOGE austerity cuts that would supposedly make our government more efficient. Republicans and the financial industry have long opposed the regulatory powers of the CFPB, so Trump's attempts to de-fang it are not out of step. Trump appointed Russell Vought as the CFPB's new leader in 2025, who was a longtime critic of the agency. Vought's first act was to tell CFPB employees to stop working. Trump also attempted to fire 1,400 employees of the CFPB, but a federal judge blocked the measure for lacking a thorough assessment. The Trump Administration also got Congress to cut the CFPB's funding in half. As one can imagine, this means that the CFPB cannot function as well as it once did, meaning that it'd be less likely to prioritize fighting student loan scams. This must be reversed. Not only should the CFPB be refunded, but its powers must be made stronger and more expansive than they were before. Contact your representatives and vote Democrat in the next election.

10. Consider legal action against the company if you can afford it.

If you have the time and the money, legal action is a worthwhile course against these predatory scammers. If successful, not only could you get your money back, and maybe even shut them down, but you could also set up a legal precedent that could be used against this sort of fraud in the future.

11. Don’t forget the consolidate your loans through your official student loan owners.

Consolidation of student loans is still a convenient way to get them paid off. It can be done completely free through the official federal student aid website.