Top Tips to Protect Yourself from Student Loan Scams

Smart Tips to Protect Yourself from the Latest Loan Forgiveness Schemes

Student loans are a hot topic—and scammers know it.

With ongoing changes to federal student loan policies, forgiveness programs, and repayment plans, it’s no surprise that scammers are taking advantage of confusion and urgency to target borrowers. These fraudsters promise debt relief, fast loan forgiveness, or lower payments—for a fee—but they’re only after your personal and financial information.

In this guide, we’ll break down how student loan scams work, how to spot red flags, and most importantly, how to protect yourself and your money.

Why Student Loan Scams Are on the Rise

Scammers follow the headlines. With major changes like:

Loan repayment pauses during COVID-19
Updates to Income-Driven Repayment (IDR) plans
The Biden administration’s forgiveness proposals

Borrowers are overwhelmed—and scammers are ready to strike. They often pretend to be from the Department of Education or a loan servicer and push urgency like “Apply before the deadline!” or “We can get you forgiveness today!”

Common Student Loan Scams to Watch Out For

1. Loan Forgiveness for a Fee

The scammer says you qualify for forgiveness but must pay an upfront “processing” fee or monthly service fee.

⚠️ Red flag: No legitimate loan forgiveness program requires payment.

2. “We’re from the Department of Education”

They use fake names, spoofed phone numbers, or government logos to sound official. Then they ask for your FSA ID or Social Security number.

⚠️ Red flag: The Department of Education won’t call or email you out of the blue requesting personal information.

3. Fake Debt Consolidation Services

These companies promise to consolidate your federal loans into one lower monthly payment but charge for a service you can do yourself for free.

⚠️ Red flag: Pushy tactics, limited-time offers, or promises that sound too good to be true.

4. Suspicious “Application Assistance”

They offer to help you apply for forgiveness, IDR plans, or deferments—often charging a monthly fee.

⚠️ Red flag: Legitimate servicers and studentaid.gov offer free help.

5. Threats of Legal Action or Wage Garnishment

You get a call threatening lawsuits, arrest, or garnishment unless you act fast.

⚠️ Red flag: Real loan servicers don’t threaten you like this—especially not over the phone.

How to Protect Yourself from Student Loan Scams

1. Never Pay for Loan Forgiveness

All federal student loan forgiveness programs (including PSLF, IDR, Teacher Forgiveness, etc.) are free to apply for. You can manage them yourself at StudentAid.gov.

2. Guard Your FSA ID Like a Password

Scammers may ask for your FSA ID to “check your eligibility.” If they get it, they can steal your identity and reroute your loan payments.

Pro Tip: Never share your FSA ID with anyone—not even third-party “helpers.”

3. Verify Who You’re Talking To

Always double-check:

The name of your loan servicer (e.g., MOHELA, Aidvantage, Nelnet, EdFinancial)
Contact details by visiting their official websites directly
Communications from government agencies via .gov domains

If in doubt, hang up and call your loan servicer directly.

4. Ignore Unsolicited Calls or Emails

Most scams start with unsolicited contact claiming to help with loan forgiveness or repayment.

Don’t click links or provide personal info in response to random emails, texts, or ads. And if someone is pressuring you to act “right now,” that’s a sign to walk away.

5. Use Trusted Sources Only

Get loan information directly from:

https://studentaid.gov
Your official loan servicer
The Department of Education

Avoid random third-party companies offering paid services—they often exploit borrowers.

6. Monitor Your Loans Regularly

Confirm your balances and due dates
Spot unauthorized changes
Ensure your loans are still in good standing

What to Do If You’re Targeted or Scammed

If you’ve been scammed or suspect a fraud attempt:

Report it to the Federal Trade Commission: https://reportfraud.ftc.gov
Contact your loan servicer immediately to make sure your account hasn’t been compromised.
Reset your FSA ID password right away at https://studentaid.gov/fsa-id
Check your credit reports via AnnualCreditReport.com to look for suspicious activity.
Place a fraud alert or credit freeze with the major credit bureaus (Equifax, Experian, TransUnion) if you shared sensitive data.

Final Thoughts

Student loan scams are growing, but with the right knowledge, you can protect yourself. Stay skeptical of unsolicited offers, guard your information closely, and always go directly to trusted sources like StudentAid.gov for updates and support.

Your debt may be real—but so are the tools to manage it safely and securely. Don’t let a scammer stand between you and financial freedom.