Countless students across the U.S. take loans when attending college and obtaining their degrees and other qualifications, which often leaves them with large amounts of debt. This, unfortunately, makes them prime targets for scammers, with many making use of student loan forgiveness scams to trick unsuspecting people into handing over money or personal information.
This guide shows you how to spot student loan forgiveness scams and offers useful tips to stay safe.
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How Do Student Loan Forgiveness Scams Work?
Student loan forgiveness scams can take various forms. Scammers might contact their victims by mail, over the phone, email, or even on social media. Typically, the scammer will pose as a student loan forgiveness company offering to help the borrower either pay off part or all of their debts or consolidate them.
They may even make bold claims that they can help you get your entire debt forgiven, offering services like:
- Negotiating with your lender
- Reviewing your loan files
- Filling out a student loan forgiveness application for you
Sometimes, the scammers might already have some details about you, including your existing loan balance. This helps them appear more authentic and convincing. However, in reality, they have no power to help with debt forgiveness and often vanish once their victim has paid them a so-called “admin” or “processing” fee for their services.
Red Flags You Shouldn’t Ignore
Unexpected and Unsolicited Messages or Calls
Often, student loan forgiveness calls or messages come completely out of the blue. They may catch you off-guard, as you likely wouldn’t have been expecting that kind of contact. This is all part of the scammers’ strategy, and they’ll often cold call many people or send messages to different emails and social accounts in the hopes of getting at least a few people respond.
Demands for Up-Front Payment
A big red flag with student loan forgiveness scams is when scammers ask you to pay in advance for their aid or services. There are financial service companies who will naturally demand a fee in exchange for their help, but they won’t ask you to pay them up-front. That’s illegal, and it’s something you should never do.
Asking You for Sensitive Info
It’s never a good sign when you get a call or message from someone who suddenly starts asking you for detailed personal information, like your Social Security number or bank account details. In fact, this is almost always the sign of a scam. Official bodies, like the Department of Education and its associated partners, won’t ask you for these details.
Claims that Are Too Good to Be True
Many people dream of having their student debt forgiven or wiped out, and that’s why scammers use tricks like this. They play on people’s hopes, offering things that sound too good to be true. Unfortunately, in the majority of cases, if something sounds too good to be true, then it’s probably false. If a company says they’ll wipe out all your debt, it’s almost certainly a scam.
Aggressive, Urgent, or Even Threatening Language
It’s also commonplace for scammers to use language that sounds urgent or even threatening in some cases. They might say you need to “act now or miss out” on getting your debt canceled, for example, or say that they’re offering loan forgiveness, but only on a “first come, first served” basis. This is designed to pressure you into panicking and calling them right away.
Typos, Grammatical Errors, or Other Inconsistencies
Many scammers may not speak English as a first language or might rush through writing their scam texts, so their messages and emails can sometimes contain weird typos, grammatical errors, or other inconsistencies. Usually, an official body, like a loan consolidation company, won’t make such basic mistakes.
How to Stay Safe from Student Loan Forgiveness Scams
- Never agree to pay up-front for any kind of loan forgiveness or consolidation.
- Don’t provide personal details over the phone to companies or people you don’t know.
- Always verify your loan status with the Department of Education or an official partner.
- Don’t respond to aggressively-worded messages, emails, or calls about your loans.
- Avoid clicking any strange links in emails or texts.
Report the Scam
You can report suspected scammers directly on the Federal Student Aid page. You may also:
- Report to the FTC.
- Report to the FBI Internet Complaints Center.
How to Protect Yourself More
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Read up on other scam types, like social media scams, so you know some of the common tricks fraudsters use.
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