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Student loan scams are common, especially as confusion remains over student loan forgiveness. Scammers prey on overwhelmed borrowers who have reached a point of desperation. They might promise a path to forgive your loans completely and immediately. But most government programs require several years of payments in an eligible field of employment before you qualify for forgiveness.
Some scammers might promise "Biden loan forgiveness" or "stimulus forgiveness," but these programs don't exist. Some scams may attempt to impersonate the Department of Education, and put forth programs with confusing language meant to deceive the borrower.
Here's what you can do to spot scams and find real paths to forgiveness.
A scammer might offer to help you consolidate your loans, pause your payments, or change your repayment plan — for an upfront fee. You can access this help yourself for free by contacting your student loan servicer.
Scammers might not even ask for money and instead go after your personal information, such as your Social Security number, Federal Student Aid password, or bank routing info.
Be careful, as these calls and emails can often appear legitimate. Scammers could use titles that sound legitimate, agent numbers, and in some cases might have details on the amount of student loan debt you have. Even if someone knows how much money you owe, don't automatically trust that they're legitimate — they may have obtained the information illegally.
They might add urgency to their ask, telling you that their program is first-come, first-served, guaranteeing fast results to those who sign immediately. They may also ask for your FSA ID and other personal information.
To stay protected from predatory loan forgiveness scams, there are a few things to keep in mind:
If you already think you've been scammed, you can take the following steps to prevent the situation from getting worse.
There are currently forgiveness programs in place for federal student loans, like Public Service Loan Forgiveness, and accommodating repayment options, like Income-Driven Repayment Plans. Neither of these options charge any fees to apply or enroll in (like some scammers would have you believe) — you just have to meet certain requirements to qualify.
You may also be eligible to have your loans discharged in the event of total and permanent disability or if your school closes while you're enrolled. The Department of Education has also cancelled student debt for some defrauded borrowers and for some borrowers with disabilities.
The Biden administration may cancel student debt on a large scale, with politicians and activists calling for anywhere between $10,000 and $50,000 of debt to be forgiven. However, the federal government has yet to guarantee any action and is still looking into the legality of cancelling student debt via executive order.
I've been scammed, what should I do? Chevron icon It indicates an expandable section or menu, or sometimes previous / next navigation options.
If you've been scammed, report it! The Federal Trade Commission, your state Attorney General, and the Department of Education are good places to start.
Are there any legitimate companies that help with student loans? Chevron icon It indicates an expandable section or menu, or sometimes previous / next navigation options.
Yes, there are companies that will help with student loans, but do your research. Non-profits often offer free assistance. Be wary of for-profit companies charging fees.
What are the real student loan forgiveness programs? Chevron icon It indicates an expandable section or menu, or sometimes previous / next navigation options.
Real student loan forgiveness programs include Public Service Loan Forgiveness (PSLF), Income-Driven Repayment (IDR) forgiveness, teacher forgiveness, etc. Official details are ONLY on https://studentaid.gov/.
Don't let scammers profit off your student debt. Be informed, skeptical, and cautious when seeking help with your loans. Prioritize official government resources for safe and reliable guidance.
Ryan Wangman was a reporter at Personal Finance Insider reporting on personal loans, student loans, student loan refinancing, debt consolidation, auto loans, RV loans, and boat loans. He is also a Certified Educator in Personal Finance (CEPF). In his past experience writing about personal finance, he has written about credit scores, financial literacy, and homeownership. He graduated from Northwestern University and has previously written for The Boston Globe.
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