Date Posted: 
Tuesday, May 10, 2022

If you receive an email, letter or call about student loan debt forgiveness, pause before you send along any of your personal information.

It could be a scam.

Numerous student loan borrowers recently submitted complaints to the Consumer Financial Protection Bureau (CFPB) about companies that promised them student loan forgiveness or loan forbearance in exchange for fees amounting to hundreds or thousands of dollars. Borrowers believed they were talking to their servicer or a company authorized by the Department of Education because they often knew private information such as the borrower’s loan balance or recent consolidation activity. This is fraud.

Legitimate options for federal student forgiveness as of May 2022:

Loan forgiveness is not available for all student loan borrowers at this time, though there are programs to forgive federal student loans for specific borrowers , such as public service employees. There are also instances where borrower’s may be eligible for student loan discharge .

Federal student loan servicers cannot charge you to apply for loan forgiveness, income-driven repayment (IDR), deferment, or forbearance, or to file any other paperwork. Federal loan servicers do not charge any application or processing fees to consolidate your federal loans into a Direct Consolidation Loan.

The CARES Act pause on payments and interest for federally held student loans has been extended through August 31, 2022. Forbearance on qualifying loans will happen automatically. No one will contact you to sign up for CARES Act forbearance. There is no fee to enroll in CARES Act forbearance. If your payment will be too high when the pause ends, please reach out to your servicer directly to explore a variety of payment relief options. Your federal loan servicer will not charge you any application or processing fees to help you switch to a different repayment plan such as an IDR plan or enroll in any of the deferment or forbearance options available to you.

Red Flags for Student Loan Forgiveness Scams

  • Charging upfront fees for free programs
    Scammers often attempt to charge for programs that all borrowers can access for free, including preparing the paperwork. Loan forgiveness  or discharge (to the extent those programs are available to you), loan consolidation , student loan forbearance and deferment are all free programs provided by your servicer. If a company is asking you to pay large amounts of money upfront, it is likely a scam and should be reported. 
  • Pressure to decide quickly
    Scammers might tell you that you only have 24 hours to take advantage of an offer or program. This is a red flag. Most government-offered programs do not require this sense of urgency. Confirm whether this is a legitimate company before you take any additional steps.
  • Encouraging you to cut off communications with your loan servicer
    This is warning sign that this company is not working in your best interest. As a student loan borrower, it's important for you to maintain communication with your servicer. If someone urges you to make payments to their company instead of your loan servicer or to stop communicating with your loan servicer, do not give them any information. Do not stop making payments to your servicer.
  • Claiming to be affiliated with your loan servicer or Department of Education
    Scammers might name drop organizations that you have a loan account with. Be careful of statements like “we work with Department of Education” or “we’re partnered with your loan servicer.” I
  • Asking for personal information via email or over the phone
    Scammers often ask for personal information like your full Social Security number, bank account number, FSA ID or password. Do not give any personal information to an unverified company over the phone. If you suspect the caller may be a scammer, hang up and contact your servicer directly  to determine if there are any actions required for your loan.