Student Loan Forgiveness Scams: Don't Pay for Free Help

The Student Loan Scam Explosion

With constant news about student loan forgiveness, scammers have found fertile ground. They charge fees for services that are free from legitimate sources.

How Student Loan Scams Work

The Basic Scam

1. Company contacts you about "special" forgiveness program

2. Charges upfront fees ($500-$3000)

3. Promises to get your loans forgiven

4. Either does nothing or submits basic applications

5. You're out money and still owe your loans

Types of Student Loan Scams

1. Fake Forgiveness Companies

**The pitch:** "We can get your loans forgiven through a special program!"

**Reality:** They file basic paperwork you can do yourself for free, or do nothing at all.

2. Impersonating Servicers

**The pitch:** "We're calling from your loan servicer about a special offer."

**Reality:** Your real servicer never cold-calls about special programs.

3. "Pre-Approved" Mailers

**The pitch:** Official-looking mail saying you're pre-approved for forgiveness.

**Reality:** Legitimate programs don't send pre-approval letters.

4. Fee-Based Application Help

**The pitch:** "For a fee, we'll help you apply for PSLF/IDR."

**Reality:** Applications are free. Servicers help for free.

Red Flags of Student Loan Scams

Language Red Flags

"Limited time offer"

"Guaranteed forgiveness"

"Pre-approved"

"Biden forgiveness program" (used deceptively)

"New government program"

Process Red Flags

Upfront fees required

Asks for your FSA ID and password

Pressure to sign up immediately

Asks for power of attorney

Guarantees specific outcomes

Contact Red Flags

Unsolicited calls/texts/emails

Can't verify company legitimacy

Asks for payment by gift card or wire

Creates urgency

Legitimate vs. Scam Services

Legitimate (FREE) Help:

StudentAid.gov

Your loan servicer

Nonprofit credit counselors (NFCC members)

State attorney general offices

Legal aid societies

Scam Operations:

Charge upfront fees

Guarantee outcomes

Cold call or text

Ask for your login credentials

Pressure immediate decisions

What Legitimate Forgiveness Programs Exist

Public Service Loan Forgiveness (PSLF)

For public sector employees

Apply through your servicer (free)

Requires 120 qualifying payments

Income-Driven Repayment (IDR) Plans

Lower payments based on income

Apply through StudentAid.gov (free)

Forgiveness after 20-25 years

Teacher Loan Forgiveness

For teachers in low-income schools

Apply through your servicer (free)

Borrower Defense

For defrauded students

Apply through StudentAid.gov (free)

**Notice:** All legitimate programs are FREE to apply for.

How to Verify Legitimacy

Check the Company

Search "[company name] reviews"

Check BBB ratings

Search "[company name] scam"

Verify registration with state AG

Check the Offer

Contact your servicer directly

Visit StudentAid.gov

If it costs money, it's likely unnecessary

Check Contact Methods

Did they contact you first? (Red flag)

Can you verify their phone number independently?

If You've Paid a Scam Company

Immediate Steps

1. Stop paying them more

2. Don't give additional information

3. Change your FSA ID password

4. Request refund in writing

Report the Scam

FTC: reportfraud.ftc.gov

CFPB: consumerfinance.gov/complaint

State Attorney General

Department of Education

Protect Your Loans

Contact your real servicer

Check that no unauthorized changes were made

Monitor your account closely

Getting Legitimate Help

Free Resources

1. **StudentAid.gov** - Official government site

2. **Your servicer's website** - Free application help

3. **NFCC.org** - Find nonprofit credit counselors

4. **Student Loan Borrower Assistance** - consumerfinance.gov

Questions? Contact

Federal Student Aid: 1-800-4-FED-AID

Your loan servicer (number on your statement)

Conclusion

Student loan forgiveness help should be FREE. Any company charging fees to help with federal programs is either scamming you or charging for services you can get at no cost. When in doubt, go directly to StudentAid.gov.