UPDATED: August 13, 2022

Paying for student loans can be challenging, especially as a fresh graduate navigating the real world. Wouldn’t it be nice to have your loan forgiven? Unfortunately, student loan forgiveness scams are rising. 

While legitimate institutions offer student loan forgiveness, criminals have found ways to infiltrate the process and further ruin your finances. Scammers can be quite convincing. Not knowing the warning signs can keep you vulnerable to attacks.

That said, we looked at the latest reports on student loan forgiveness scams to understand the newest tactics scammers use to trick people. We also checked official government sources to verify its loan forgiveness programs.

More importantly, we gathered the best tips from experts to protect your information online. Don’t miss out on a unique tip we’ve uncovered, which lets you know what to do when you encounter a student loan forgiveness scam.

What are the warning signs of student loan forgiveness scams?

Student loan forgiveness scams target borrowers who fraudulent companies have convinced to pay specific amounts in exchange for student loan forgiveness. 

Victims believe that they’re speaking with their service provider or someone authorized by the Department of Education. These scams are often believable because criminals also typically have access to loan balances and other details, including consolidation activities. 

To ensure you avoid falling victim to such scams, keep the following warning signs in mind:

They ask you to pay upfront fees

Legitimate student loan forgiveness offers free services, and you only have to meet certain eligibility criteria to qualify. Scammers, however, will charge you for every possible process—including paperwork. 

Keep in mind that real programs offer free student loan consolidation, loan forbearance, loan forgiveness, and even loan deferment. If they’re asking you to pay for anything upfront, especially large sums of money, report them to the authorities immediately. 

They force you to make quick decisions

We’ve all experienced pushy salespeople who rush you into saying yes to their products and services. They usually do this right after they’ve walked you through massive amounts of information, making it difficult to process and decide if you want something. In the end, you end up saying “yes.”

Scammers use this same tactic, forcing you to pay for fees or sign documents right away. If a student forgiveness loan program doesn’t allow you time to remunerate on options, walk away. 

They claim to be your only source of financial relief

Scammers usually claim that they are the ONLY source of student loan forgiveness. They claim to have helped struggling borrowers. 

They’re trusted and accredited, they say, and you no longer have to rely on government agencies for help. When you hear these things, look for assistance elsewhere. 

They give you total loan forgiveness quickly

If it’s too good to be true, it probably is—especially when it comes to student loan debt. It just isn’t possible to forgive all student loans completely and do so overnight.

Legitimate government forgiveness programs take years, as borrowers need to qualify according to requirements. All loan payments are set by federal law. 

They force you to pay monthly bills 

If you’re seeking financial assistance, it’s usually a one-time event—and free. When a company asks you to pay recurring fees or arranges for you to course your student loan payment through them, you’re a scam target. 

They would never remit the money to the lender, which can greatly affect your credit score. Similarly, collecting fees can eventually take a toll on your financial standing. 

They ask for your personal information via email or over the phone

You may ask, “Why would the Department of Education call me?” The fact is that they won’t—especially not regarding your student loan. If you receive these student loan forgiveness spam calls and they ask for your information, it’s best to walk away.

Any legitimate student loan forgiveness provider will never ask you to divulge personal information, especially via email or phone. Scammers usually ask for the following details, which they can later use for other fraudulent activities:

  • Social Security number
  • Bank account
  • Password on the Student Loan Assistance Department website (Federal Student Aid, or Studentaid.gov
  • FSA ID

If you suspect they’re trying to scam you, ignore the email or drop the phone call. 

They convince you to cut ties with your loan service provider

If they’re asking you to cut ties with your loan provider, proceed with caution. It’s a telltale sign that the company doesn’t have your best interest in mind. 

Any further interaction with them can lead to scams, identity theft, financial ruin, and other cases that can harm you.

You must always keep in touch with your loan service provider. Above all, make sure to ONLY pay directly to them.

How to avoid student loan forgiveness scams

If you fall victim to a student loan forgiveness scam, you’re also at risk for identity theft and unauthorized access to your student loan account, both of which can be dangerous. 

It can impact your financial standing, as criminals can damage your credit and steal your hard-earned money. Here’s how to avoid falling into their traps:

1. Research the company to check if they’re legitimate

Phishing is one of the most prevalent words in scam language you might hear—in this case, it’s when scammers pose as representatives from legitimate institutions. They might even create official-looking websites that can be easy to fall for.

Before signing any documents or agreeing to transfer payment, verify the company you transact with. You can do so through the help of third-party sites, such as the Better Business Bureau (BBB). Here, you’ll find actual reviews from users across the country.

You can also conduct quick Google searches, which allows you to see if there are news stories covering scams related to the company’s name. Unfortunately, a website presence isn't enough proof that a business is legitimate, as anyone can now pay for domain names. 

2. Don’t call back if you receive student loan forgiveness spam calls

Tim Connon, Founder of ParamountQuote Insurance Advisors, offers us this tip: “Do not answer their phone calls. Most scammers try to get people on the phone and then use fear to convince them they are calling about their loan.”

“The best way to avoid this is to be aware that you will not receive phone calls like that. You will receive a formal letter and respond accordingly that way. You will not receive phone calls about your student debt.”

If you receive robocalls, or automated messages, regarding your student loan repayment, do not answer or call back. 

The Federal Communications Commission has been issuing warnings against these scams, as criminals can record your voice for later use or perhaps threaten you into complying with their demands. 

3. Never pay upfront fees

No matter how convincing a service may seem, never agree to any upfront payment fees. This is usually a sign you’re dealing with a scammer, as most of the process should be free of charge. 

If you’re working with a legitimate company, however, expect them to bill you after the process has been successful–not prior. 

What to do if you have been a victim of a student loan forgiveness scam

Knowing when you’ve been scammed can be difficult, especially if you end up paying numerous fees. 

You’ll likely find out later what has happened, possibly a few months after. When you do, however, remember that you’re in a race against time. 

At the hands of a criminal, they can take your personal information anywhere for selling on the dark web, opening bank accounts, and other criminal activities. To minimize the risks, here’s what you can do:

1. Change your credentials

If you believe a hacker has compromised your online student loan account or FSA ID, change your password as soon as possible. 

After doing so, make sure to spend some time checking your information, including your email address, residential address, and contact numbers. You need to ensure that they’re still accurate, unchanged by the scammer. 

2. Report suspicious incidents immediately 

If you suspect that a scammer has contacted you, hang up and don’t attempt to contact them again. 

You need to report the number to appropriate authorities, including the following agencies: 

3. Contact your bank

Contact your bank immediately if you’ve decided to pay the scammer through a credit card or bank transfer. You can start a claim to cancel the payment, especially if you've applied for a recurring monthly due. 

You also have the option to freeze your credit card, but it’s best to contact the bank for advice. 

4. Block student loan robocalls

How do you stop student loan forgiveness calls? If you get frequent calls from robocalls, you can register with the National Do Not Call Registry for free. This agency operates under the Federal Trade Commission and has been in the industry since 2003.

Doing this will help reduce telemarketing and robocalls on your phone.

If you continue to receive spam calls, you can report them to the FTC’s Complaint Assistant or via the Federal Communication Commission’s online form.

For robotexts, on the other hand, make sure to forward the message to 7726 (or SPAM), as this helps your phone carrier block the number as spam. 

Legitimate ways to get student loan forgiveness

Are there any legitimate programs that can help with your student loans? The short answer is yes. For example, Nelnet has these student loan forgiveness options you may apply for:

Teacher Loan Forgiveness

The Teacher Loan Forgiveness is available for borrowers who teach full-time, provided they have completed five consecutive academic years. They must also come from a low-income elementary or secondary school, but those from educational service agencies are also welcome to apply.

Those eligible for forgiveness can receive up to $17,500 on direct or FFEL Program loans.

The Teacher Loan Forgiveness Program website can walk you through further details, such as the eligibility requirements and instructions on how to apply.

Public Service Loan Forgiveness

If you’re in public service or an employee of a not-for-profit organization, you can be eligible for loan forgiveness under the Public Service Loan Forgiveness (PSLF) Program.

PSLF can cover the remaining balance on your Direct Loan, provided that you have already repaid 120 qualifying monthly payments, all while working full-time for a qualified employer or agency.


Given the rising costs of living, it’s no wonder that many student loan borrowers desperately seek ways to ease the burden of monthly payments through student loan pauses or forgiveness. 

While seeking assistance isn’t a bad thing, it’s important to remain vigilant–scammers are everywhere.