Securing Our Communities: Student Loan Forgiveness Scams

Each week, the NTIC Cyber Center highlights a different social engineering scam impacting individuals and communities within the National Capital Region. We encourage everyone to share this information with friends, colleagues, and loved ones to help reduce their risk of becoming a victim of financial fraud and identity theft.

Student loan forgiveness scams, also known as student loan debt relief scams, are a type of social engineering scheme in which the perpetrator elicits money from victims through fraudulent student debt relief services. Perpetrators emotionally manipulate those eager, or struggling, to pay off their student loan debts by offering to forgive payments, consolidate loans, or refinance for a service charge. They target victims using email, websites, voice messaging services, and social media. Their messages may include false claims such as “Act now to qualify for student loan forgiveness,” or “You may qualify for a reduction in your student loan debt,” and prompt targets to call a specific phone number for more information. Callers will then face a high-pressure sales pitch designed to quickly separate them from their money and personal information.

Keep in mind that, while it is not necessarily illegal to offer paid student debt management services, it is important to recognize the potential warning signs of this type of scam. The NTIC Cyber Center encourages you to share this information with your colleagues, family, and friends as there are over 44 million borrowers in the United States that owe a combined total of over 1.5 trillion dollars in student loan debt.

  • Loan management companies claiming to have a partnership with the US Department of Education are fraudulent. The US Department of Education only partners with contracted student loan servicers.

  • Ignore offers that promise fast student loan forgiveness and those with tight enrollment deadlines as these are sales tactics used to pressure you into acting quickly without thinking.

  • Cease contact with anyone who claims that he or she can immediately cancel or forgive student loans as this is not possible.

  • Look for frequent spelling and grammatical errors as well as forged US Department of Education logos in solicitations; these are common scam indicators.

  • Disregard any correspondence claiming you owe "federal student taxes" as this type of tax does not exist.

  • Never pay upfront fees. It is illegal for organizations to demand payment prior to reaching a loan settlement. There is also no guarantee of obtaining financial help or receiving a refund after the fees are paid.

  • Never provide your Federal Student Aid ID (FSA ID) or Social Security number (SSN) without proper vetting of the requesting organization. Scammers can use this information to steal your identity and even apply for student loans in your name, preventing you from obtaining student aid or other types of financial assistance in the future.

  • Never sign power of attorney agreements or third-party authorization forms as these can allow fraudulent organizations to make legal decisions on your behalf, change your account and contact information, and negatively impact your credit and finances.

  • Scrutinize student loan debt management programs extensively before enrolling, verify their legitimacy with your student loan servicer, and consult with the servicer on what other financial options are available.

  • Remember that legitimate student loan debt consolidation programs do not actually lower the principal or accrued interest amounts of the loan; they merely bundle the debt into one monthly payment and provide a new fixed interest rate that represents a combined weighted average of the current loan interest rate.

  • Visit the official US Department of Education Federal Student Aid website or call their Student Loan Support Center at 1-800-557-7394 for more information about legitimate student aid options.

  • For a list of individuals and organizations banned from providing debt relief services in the United States, visit the US Federal Trade Commission’s website here.

If you believe you have fallen victim to a student forgiveness scam, notify your loan servicer immediately. Report all student loan forgiveness scam attempts to your State Attorney General’s office, the Consumer Financial Protection Bureau (CFPB), and the US Federal Trade Commission.

The NTIC is governed by a privacy, civil rights, and civil liberties protection policy to promote conduct that complies with applicable federal, state, and local laws. The NTIC does not seek or retain any information about individuals or organizations solely on the basis of their religious, political or social views or activities; their participation in a particular noncriminal organization or lawful event; or their race, ethnicities, citizenships, places of origin, ages, disabilities, genders, or sexual orientations. No information is gathered or collected by the NTIC in violation of federal or state laws or regulations.