8 Warning Signs of Student Loan Scams

Many student loan scams, including student loan forgiveness scams, defraud students of their money every year. Protect yourself by knowing the warning signs.

Updated by Gowtham Ramesh on 18th September 2021

Right now, there is over $1.5 trillion stuck in student loan debt in the USA. Not just billions, but over a trillion

When there’s so much money in one place, the chances for scams and scammers increase. Scammers try to access that money through many avenues, mainly through student loan forgiveness scams. Have you been thinking, “why do I keep getting calls about student loans that seem fishy?” Chances are, that’s a scammer trying to take your money. If you receive a student loan forgiveness call that seems too attractive to be real, it probably is.

When students fall for student loan forgiveness calls, scammers usually convince them that some of their debt will be forgiven due to a pass in new law or rule. They might also charge you a one-time or monthly fee to sign up for federal programs, when you can sign for these programs on your own for free. 

Here is some information about common student loan scams, warning signs, and action to take if you’ve fallen for a student loan forgiveness scam. 

Table of Contents

8 Warning Signs of Student Loan Scams 


1. You Must Pay Upfront For Student Loan Forgiveness and Support 

Scammers will promise you support in filing for loan forgiveness, debt consolidation, lower interest rates, and scholarships to help you with your student loan debt. All at the cost of 1-5% of your student loan debt, or through “processing fees” and “administrative fees.” Yikes! If someone requests money up front before providing you with the service, run! This is illegal and a clear sign of a scam. 

The federal government charges a 1% default fee and no origination fees. Private loan companies charge either disbursement fees or origination fees, which are negotiable and vary between lender to lender. No reputable organizations charge up front. If you see something like, “We get paid once you have made your first payment on your new repayment program," this is usually legitimate. 


2. You Have to Pay for an Otherwise Free Service

Students can manage their student loan debt through various actions at no cost to them. For example, it doesn’t cost anything to fill out a form, or renegotiate your federal student loan payment plan. If a caller or company tries to charge you for these free services, it’s usually a sign of a scam. 


3. You’re Promised Immediate Student Loan Forgiveness 

Scammers often promise immediate student loan forgiveness — for a fee, of course! The truth is, no legitimate student loan forgiveness program offers immediate relief. For example, through the Public Service Loan Forgiveness (PSLF) Program, you won’t have your loan discharged until you work for 10 years with a qualifying employer and make the right payments over time. And, only certain individuals actually qualify for this program. 


4. There Isn’t Much Online Information About the Company, Caller, or Program

Look into the person calling you to offer student loan forgiveness. Many scammers don’t have a lot of information online, like their business address, or any online reviews. And, if the person calling says they are a government representative, check the government website for information about the service they are advertising. If the service is unavailable online, or available at no cost, the call is definitely a student loan scammer.


5. You’re Pressured to Sign Up or Pay Quickly 

Some scammers use high-pressure sales tactics to encourage you to make a quick decision. Be weary of anybody student help relief phone call where you feel pressured to give out personal information, make a decision quickly, or pay immediately. Scammers are on a tight deadline, because they know a little bit of research might deter you from falling for their student loan forgiveness scam.  


6. You’re Asked to Provide Personal Information 

No legal company will ask for your confidential personal information, like your social security number, over the phone. Sometimes, scammers will ask for your Federal Student Aid ID as well, which might seem harmless. But, they later use this to sign into your account and access your debt profile and funds. Furthermore, some student loan scammers will ask you to sign a power of attorney agreement. Never, ever sign this, as it would give the scammer the authority to communicate with your student loan servicer on your behalf. 

Remember: Legitimate loan servicers and student loan debt relief companies will never request your personal information over the phone. 


7. No Professionalism

If you receive emails from student loan forgiveness companies with spelling and grammar errors, or unprofessional email etiquette, it could be a scam. 


8. Something Just Doesn’t Feel Right

When in doubt, trust your gut. If something feels fishy, err on the side of caution. 


What to Do If You’re the Victim of a Student Loan Forgiveness Scam

If you’ve fallen for a student loan scam, don’t fret. You are certainly not the only one—thousands of borrowers fall victim each year. Here are your next steps: 

Contact Your Loan Servicer, Bank, and Credit Card Company

Inform your loan servicer of the situation immediately, as they can help you reverse any third-party authorizations. Ask them what steps you can take in the meantime. You should also contact your bank and credit card company, who can look out for any fraudulent transactions. Your credit card company might also be able to reverse any fees from fraudulent transactions that have already occurred. 

Change Your Passwords

Change all of your passwords for your student loan account, bank accounts, and email accounts. Make your passwords different for each account, and difficult enough to minimize the chance of a scammer guessing them. 

Report the Scam

Report the scam by filing complaints with the Consumer Financial Protection Bureau (CFPB), Federal Trade Commission (FTC), and your state attorney’s office. These offices can investigate the scammer, and advise you on other identity protection measures. 

Source: pixabay.com

Freeze Your Credit Report

Call all of the credit bureaus— Experian, Equifax, and TransUnion— to freeze your credit report. Inform them of the scam so that they can stop any scammers from creating new credit accounts in your name. 


Some Reputable Student Loan Lenders

Many scammers claim to be from popular student lending organizations and try to scam people who don’t know any better. Here are some reputable lenders and their contact information. If you receive a suspicious call from anyone claiming to be from one of these organizations, call the organization at their office to confirm.

College Ave Student Loans

Text: 855-910-0510 

844-422-7502 (New Student Loan Application)

844-803-0736 (Existing Student Loans)

Sallie Mae

Phone number: 855-756-5626 (New Student Loan Application)

                          800-472-5543 (Existing Student Loans)


Phone number: 1-800-DISCOVER

Common Bond

Phone number: 800-975-7812

Was Navient Guilty of Student Loan Scams?

The U.S. Consumer Financial Protection Bureau(CFIB), along with the Illinois and Washington attorney general sued Navient in January 2017. The attorney general of Pennsylvania also filed a lawsuit against Navient in October 2017, and the Mississippi and California attorney generals filed lawsuits in June and July 2018, respectively.

The CFPB alleged that Navient steered struggling borrowers towards multiple forbearances instead of income-driven repayment plans, misallocated payments, and provided unclear information about how to re-enroll in income-driven repayment plans, and how to qualify for a cosigner release. While Navient is a student loan refinancing company, their actions are comparable to student loan scammers. 


How to Get Help for Student Loan Debt

If you need support with your student loan debt, and are interested in student loan forgiveness options, do the following first:

Contact your loan servicer to:

  • Assess repayment options
  • Pause payments temporarily
  • Reduce monthly payments temporarily

If you aren’t getting the support you need from your loan servicer, consider reaching out to organizations that offer student loan help and counseling, like the Student Borrower Protection Center, National Association of Consumer Advocates, the Student Borrower Protection Center, or student lawyers like Adam Minsky. These are all counselors and student forgiveness centers that offer student loan support. 



Student loan forgiveness scams increase in popularity as student loan debt goes up in the country. Be vigilant and wary if you  receive a student help relief phone call, and make sure you know the difference between a scam call and a federal student loan processing center phone call. Never pay money upfront or offer personal information over the phone, and act quickly if you think you’ve fallen victim to a student loan forgiveness scam. Student loan forgiveness frauds are stressful, but you can overcome them. Say goodbye to student loan scam calls and either call your student loan servicer or contact student loan counsellors and organizations. 


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Frequently Asked Questions

  • 1.Do people receive a call for student loan forgiveness programs?

    A lot of borrowers receive emails and calls with offers and notices, it is important to be cautious of these absurd claims and always verify with your servicer.

  • 2.How do I stop student loan calls?

    Register with the free National Do Not Call Registry if you haven't already at donotcall.gov or 1-888-382-1222. This will stop the legit marketers from calling you within a month.

  • 3.Is spam call dangerous?

    Spam calls are irrelevant or inappropriate messages sent over the phone to a large number of recipients – typically to those who have not expressed interest in receiving the message. Not only are spam calls annoying, but they are also very dangerous.