Student loans

How to Spot a Student Loan Forgiveness Scam

Reports of scammers claiming to offer student loan forgiveness are on the rise after Biden’s student debt relief announcement. Here’s what to look for.

Nearly 43 million Americans are eligible for student loan relief, according to White House estimates. For scammers, this means a large pool of potential victims.

After the Biden administration announced his project To cancel federal student loan debt, several VERIFY viewers contacted our team about suspicious calls they recently received from people claiming to offer student debt relief.

Antonietta texted us saying someone called her to tell her she had to pay $1,600 up front to cancel her student loans. Leslie said in an email that she received a call from someone offering her student loan forgiveness and restructuring. They both want to know if they are scams.

Here are five key things to watch out for in student loan scams.


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On August 24, the Biden administration announced his project to erase up to $10,000 in federal student loan debt for borrowers with incomes below $125,000 per year or households earning less than $250,000. An additional $10,000 will also be waived for people who received federal Pell grants to attend college.

Since student loan cancellation plan was announced, according to the Better Business Bureau (BBB) reports of people who say they have been the target of fake student loan forgiveness calls and messages are on the rise. The BBB says these scammers contacted people through unsolicited phone calls, emails or text messages.

More CHECK: Quick Facts About Student Loan Forgiveness

Here are five key things to look out for when assessing whether something is a student loan scam:

Scammers often trick victims into providing unnecessary payment for free government programs – or they claim you can get additional or faster benefits up front for a fee, but the BBB says a genuine government agency, such as the US Department of Education, will never charge advanced processing fees for student loan relief.

Participation in the Biden administration’s student loan forgiveness program is free. Abby Shafroth, director of the Student Loan Borrower Assistance Project at the National Consumer Law Center, told VERIFY that borrowers “don’t have to pay for this relief.”

“This repair is available for free,” Shafroth said. “If you get these calls, hang up the phone. You don’t need to pay anyone for help.

If you are having difficulty repaying your student loans, the Department of Education and the Federal Trade Commission (FTC) advise you to contact your loan officer.

2. Asks you to share personal information, such as your Federal Student Aid (FSA) ID or bank account information

The FTC Says Some Scammers Claim They Need Your Federal Student Aid (FSA) ID to help forgive your student loans, but they may actually use this information to try to steal your identity instead.

“Do not share your FSA ID with anyone. Dishonest people could use this information to access your account and impersonate you,” the FTC warns.

Credible, a personal finance fintech company, and the BBB say some scammers may also ask borrowers to complete an online application or sign a third-party authorization form or power of attorney to obtain debt forgiveness.

If a person does this, Credible warns that the scammer is then authorized to speak to the individual’s federal loan department and make decisions on their behalf – they could even change their personal account information. But Credible says “a reputable company will never ask you to sign a power of attorney form.”

3. Promises immediate student loan relief

Some student borrowers are eligible for specific federal student loan forgiveness programs, such as the Public Service Loan Forgiveness (PSLF) and the Teacher loan forgiveness programs, but none of these programs offer immediate student loan relief, as some scammers claim.

For example, the PSLF program requires individuals to make 10 years of qualifying payments (totaling 120 payments) before forfeiting the remaining balance. Meanwhile, the Biden administration’s student loan cancellation plan is still being finalized by the federal government.

More CHECK: Yes, eligible government workers can still get full federal student loan forgiveness

The Department of Education says some federal student loan borrowers will need to complete a “simple application” for debt forgiveness if the agency does not have their income data. Indeed, many borrowers were not required to certify their income during the student loan repayment pause that began in March 2020, according to Shafroth.

At this time, there is no confirmed launch date for the app, but the Department of Education and the White House both say it will be available before the end of the reimbursement break on December 31. 2022.

Borrowers who wish to be notified when the application is available can register with their email address on the Ministry of Education subscription page. Be sure to check the box labeled “Federal Student Loan Borrower Updates.”

4. Use “strong advertising language”

The Ministry of Education warns borrowers beware of scammers who use “strong advertising language” when contacting them, including the following examples:

  • “Act immediately to qualify for student loan forgiveness before the program is discontinued.”
  • “Your student loans may qualify for full discharge. Registrations are first come, first served. »
  • “Student Alerts: Your student loan is flagged for cancellation pending verification. Call now!”

“While the U.S. Department of Education (ED) may reach out to highlight temporary programs like the limited PSLF waiveraggressive advertising language like the above will not come from ED or our partners,” the Department of Education wrote on its website.

The BBB Remarks that government agencies, including the Department of Education, will not contact individuals unless they ask to be contacted first.

“If you receive a message that seems legitimate, but that you are unsure of, stop communicating with the person who contacted you. Then verify their claims by contacting the government agency they say they represent,” the BBB explains. “Impromptu communications are a red flag.”

5. Claims to be affiliated with the Ministry of Education or other government agency

Credible says some scammers use Ministry of Education logos to pass themselves off as legit. They could also try to use an official-sounding name while claiming to have partnered with the Department of Education to offer student loan forgiveness.

But the Department of Education does not partner with or authorize any organization to administer federal student loans outside of its federal loan officers under contractaccording to Credible.

Here are some ways to make sure a federal government website is legitimate:

  • Look at the web address and make sure it ends in “.gov” to see if it is genuinely affiliated with the federal government.
  • Keep an eye out for spelling or grammatical errors, as these may indicate that the site is fake.
  • If a phone number is listed, plug it into a search engine to see if it belongs to a legitimate government office or a scammer.

“If you need help with your federal student loans or are looking for some form of student loan forgiveness, be sure to contact an ED-affiliated company you can trust. Review our list of contracted federal loan managers before contacting a potential partner,” says the Ministry of Education.

How to Report Student Loan Forgiveness Scams

If you are a victim of a student loan forgiveness scam, you can submit a complaint at the Ministry of Education. You can also report the scam to FTC, Consumer Finance Protection Bureau (CFPB)or your state attorney general.

More CHECK: Yes, there is a way to check if you have received a Pell Grant

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