Learn about common student loan assistance scams and how to avoid them.

Paying off student loan debt can be overwhelming and daunting. Scammers prey on this, baiting consumers with fraudulent offers to defer, lower, consolidate or eliminate debt. Through so-called student loan assistance programs, they offer unnecessary services and unhelpful one-size-fits-all solutions. They charge high fees, often for things that federal government programs offer for free. These scams could cost you thousands of dollars and drive you further into debt.

Types of Student Loan Scams

The most common student loan scams are offers for loan relief and loan consolidation scams: 

Student Loan Consolidation Scams

If a company charges you money upfront to consolidate your federal student loans, it is a scam. These companies will take your money under the guise of a processing fee without ever consolidating your loan. 

You can consolidate your federal student loans for free by yourself at StudentLoans.gov.

Student Loan Debt Relief Scams

If a company promises you that they can eliminate or reduce your student loan debt, use caution. Student loan debt generally cannot be eliminated or forgiven, aside from special exceptions – including death, permanent disability, identity theft, and federal loan forgiveness plans and income-based repayment plans that can take many years and are available only through the Department of Education.  You do not need to hire someone to take advantage of these programs – you can set them up yourself for free through the Department of Education.

How to Spot a Student Loan Scam 

If you are unsure if a student loan assistance offer is legitimate, check for the following red flags. Does the program:

  • Make promises of immediate or fast debt forgiveness or cancellation, or a looming deadline?
  • Request upfront fees to apply for loan programs through the Department of Education?
  • Claim that the program is affiliated with the government or Department of Education, but is not part of a government agency nor an official loan servicer listed on StudentLoans.gov?
  • Request the borrower’s FSA ID?

If any of the above statements are true, the offer is likely a scam and may be reported to the Office of the Attorney General. 

It is important to make sure you are still receiving loan correspondence. Unscrupulous scammers may change your contact information on file with your lender to their own, so that their business, rather than you, receives all loan correspondence. Just because correspondence has an official-looking seal does not make the program legitimate. Do your research!

If you have concerns you may be a victim of a student loan assistance scam in regard to your federal student loans, contact the Department of Education or your lender directly to check the status of your student loans and to ensure that the information on your account is correct.