Weeks after applying for public service loan forgiveness, a federal program that forgives student loan debt for eligible workers, Kathleen Young got a phone call.
The woman on the other end said she could help Young forgive her student debt. Young, an elementary school teacher in Palo Alto, California, assumed it was the U.S. Department of Education calling about the public service program.
She verified her Social Security number and gave the woman her bank account information to enroll, which she was told would consolidate her loans and forgive them after 60 payments (public service loan forgiveness requires 120 qualified payments.) She was informed she’d see her first payment taken from her bank account in about 10 days.
Later, however, she realized something felt off. She looked up Guidance Alum, the company that called her, and saw that it isn’t associated with the Department of Education and has multiple complaints, including to the Better Business Bureau, about its services.
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“They got all this information from me, and I realized they [the Education Department] would never ask for that information on the phone,” said Young. Guidance Alum did not respond to CNBC’s request for comment.
She was able to close the bank account she gave to the company and sent Guidance Alum a formal…
