Are Those Student Loan Forgiveness Calls Real?

Here's what you need to know to avoid getting scammed.

Student debt is a nationwide plight, one that has an impact on 43.4 million Americans (that's one in eight people), according to the Department of Education's fourth-quarter report of 2022.As a nation, we carry a total of $1.745 trillion of student debt nationwide—at an average of $37,787 each, according to recent reporting by It will take decades for borrowers to pay off the principal and the accrued interest.

Whatever your stance on loan forgiveness, the fact that this debt dominates a huge swath of the United States population is indisputable. And those who carry student debt aren't only 22-year-old college grads; they're also middle-aged and older adults. According to the report, adults under 30 years old are the largest group of borrowers (17.3 million people, who hold a collective $578 billion in debt), and 30- to 44-year-old Americans hold the largest amount of debt total ($823 billion total). But there are still 2.8 million people aged 60 and over who owe student debt.

The COVID-19 pandemic brought a sense of urgency to the issue of student debt. When unemployment rates skyrocketed in the wake of lockdowns, the federal government halted all student loan payments (on federal loans) back in March of 2020. In the years since, there's been much discussion about alleviating the burden of student debt altogether. Reasonable people have argued both sides of this issue, and the government continues to wrestle with a solution. In the meantime, fraudulent actors have emerged to prey upon those who are waiting.

Enter the Scam Artists

All of this financial uncertainty has provided ample opportunity for scammers to lay waste to unemployed borrowers who are desperate to make ends meet. "Anecdotally, we're hearing more about [these scams]," says Eva Velasquez, president and CEO of the ID Theft Resource Center. "When [they] first start proliferating, it takes a while to catch up with reporting, but we're certainly hearing more from people getting the solicitations."

Velasquez explained that these scams are especially evident over social media, but they also come in the form of unsolicited phone calls and text messages from bad actors. One easy way to recognize a scam is that legitimate loan services will never call or text a borrower out of the blue. There are, unfortunately, more insidious traps out there, just waiting for the right person to take the bait.

The Main Types of Student Loan Scams

"One major red flag is if someone is trying to charge you a fee in exchange for loan forgiveness," says Rebecca Safier, a Student Loan Counselor with Student Loan Hero. "Legitimate loan forgiveness programs will cancel part or all of your student loan debt, but they won't charge you a fee to do that." Safier went on to explain that there are legitimate financial counselors that charge a fee to make a financial plan for repayment, but there's nothing that they're doing that a borrower can't do on their own, for free. "You can apply for the repayment plan [and] you can pursue loan forgiveness on your own," she says.

Also, student loan forgiveness is an involved, lengthy process. "If someone says, 'pay us this amount, and we'll get rid of your student loans,' that's definitely a red flag and probably a [...] scam," she says.

Another common scam involves loan consolidation. "Student loan consolidation is a free service offered by the Department of Education, but companies will charge you $1,500 to consolidate your loans," says Robert Farrington, founder and editor-in-chief of The College Investor.

It can be even worse. It's one thing if a company charges you for a service that's actually free. But what if someone says they'll consolidate your loans and actually does nothing at all? "That's where you see borrowers end up in more hurt than they were at the start of the process," says Farrington. "Their student loans [may be] verging on default."

Some companies make claims about negotiating repayment or forgiveness of student loans owed to private lenders. These pseudo-law firms encourage borrowers to send their loan payments to them instead of to the lender, stating that they'll keep those funds safe and that the lender will be more inclined to negotiate repayment terms. Once they've got all that money, though, the firms disappear, taking it with them.

Scammers may also be trying to access a borrower's personal identifiable information (such as an SSN or bank account number) in order to steal money or, worse, an identity. Or, they may request a borrower's FSA ID—the unique login to the federal student aid website. If the borrower hasn't been careful about using unique passwords, scammers can use those credentials to steal social media accounts, email accounts, and more.

"When people are so burdened by this financial albatross around their neck, they become desperate to get out from under it, and the risk aversion lowers, because the reward [...] could be so good," says Velasques. People may believe that they have nothing left to lose, but Velasquez is adamant that borrowers have "an awful lot to lose. It really depends on how you engage with this scammer."

What to Do if You've Been Scammed

The first thing to know about being scammed is that it happens to everyone, and doesn't reflect on a person's abilities. Tricksters and thieves are honing their skills and coming up with new tactics every day, so there's no shame in clicking the wrong link or answering the wrong text. If someone has fallen victim, the next steps will depend on what, exactly, the losses look like.

"There is no risk minimization or recovery program that's suitable for all circumstances," says Velasquez. If a person's SSN has been compromised, the first step is to freeze their credit so that no new lines of credit can be opened in that person's name. If a scammer gets a person to create a new username and password, and that person has used the same password elsewhere, the next step is to change it on all other websites.

It's not likely that someone who has been scammed will recoup their funds, unless it's possible to cancel a credit card charge or a bank transfer before it goes through. "If you paid them in Bitcoin, or a wire transfer, or a money order, or gift cards, the reality is you're not going to be able to recover that money," said Velasquez.

Beyond these avenues of protection, it's also possible (and recommended) to file a complaint with your state's Attorney General as well as with the Consumer Finance Protection Bureau (CFPB). While these avenues aren't likely to take action on individual cases, the more complaints they receive, the higher the possibility that they may shut down nefarious companies.

Do Opportunities for Loan Forgiveness Really Exist?

"It's important to know that, with federal student loans today, we estimate that about 50 percent of all borrowers already qualify for some type of loan forgiveness program," says Farrington. "There's a lot of options out there for help with your student loans."

One such opportunity is Public Service Loan Forgiveness. "If you work in public service for 10 years, you get your loans forgiven, tax-free," says Farrington. This option does take time, though, and it entails paperwork—a borrower has to file papers (the employer certification form) signed by their employer and HR representative proving that they work for a qualifying organization. According to Farrington, some scammers may reach out and offer to file this paperwork for you, for a price, despite the process being completely free to borrowers. Additionally, scammers may say they're filing the paperwork but not follow through, leaving a borrower even worse off.

Another possibility is Teacher Loan Forgiveness, a process that takes five years to complete. These years of working as a teacher must be consecutive and completed at a qualifying educational program.

Beyond these options, the federal government offers other routes to mitigate the burden of student debt. These may include serving in the U.S. military, working with AmeriCorps, or enrolling in an income-based repayment program. For loans from private lenders, there aren't many forgiveness options, and these will depend on the specific lender you're working with.

The bottom line when it comes to avoiding these pitfalls is threefold. First, if you haven't reached out to a lender, then that person calling, texting, or posting ads on social media is probably trying to trick you into something that's bad for you. Second, all forgiveness programs can be done for free, but they take time. Reading up on legitimate websites will get you all the information you need to apply for them.

Third, and most important: Knowledge is power. By educating yourself on the options, you'll be able to sidestep any possible dangers. It's a scary world out there, but with the right tools at hand, we can all stay safe.

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  1. Federal Student Aid, Federal Student Loan Portfolio Summary. Accessed Jan. 26, 2023.

  2. Education Data Initiative, Student Loan Debt Statistics. Accessed Jan. 26, 2023.

  3. Education Data, Student Loan Debt by Age. Accessed Jan. 26, 2023.

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