What are Student Loan Forgiveness Scams and How to Avoid Them

The student loan debt crisis in the United States continues to escalate, with total American student loan debt reaching over $1.5 trillion, according to the Federal Reserve Bank of New York. This has led to an increase in student loan forgiveness scam, with scammers targeting individuals with offers of help to consolidate or refinance their loans. The recent announcement by President Joe Biden to cancel up to $20,000 in federal student loan debt has further increased the number of scam calls requesting personal information or payment. It is important for individuals with student loan debt to be cautious of these scams and protect their personal information.

What is a Student Loan Forgiveness Scam?

A student loan forgiveness scam is a fraudulent scheme that targets individuals with student loan debt by offering to help them obtain student loan forgiveness for a fee. The scammer may claim to have access to special programs or insider knowledge that can help the individual qualify for student loan forgiveness, but, in reality, the scammer does not provide any services and simply takes the fee for themselves.

Common Types of Student Loan Forgiveness Scams

Student loan forgiveness scams can take various forms, such as calls or emails from fake student loan companies, fake websites that mimic legitimate student loan services, or fake advertisements or offers on social media or other platforms. The scammer may use persuasive language or false promises to convince the individual to provide their personal information or make a payment, often using scare tactics or urgency to pressure the individual into acting quickly. Here are some common forms of student loan forgiveness scams.

• Fake student loan consolidation or refinancing companies: These scams involve fake companies that claim to help individuals consolidate or refinance their student loans for a fee, but in reality, they do not provide any services and simply take the fee for themselves.
• Fake websites: These scams involve websites that mimic legitimate student loan services, but are actually run by scammers. The scammer may use the website to collect personal information or payment from the individual.
• Fake ads or offers on social media or other platforms: These scams involve fake advertisements or offers on social media or other platforms that promise to help individuals with their student loan debt. The scammer may use persuasive language or false promises to convince the individual to provide their personal information or make a payment.
• Phishing emails or calls: These scams involve emails or calls from fake student loan companies that request personal information or payment. The scammer may use urgent or persuasive language to pressure the individual into acting quickly.
• Fake government programs or policies: These scams involve fake government programs or policies that claim to offer student loan forgiveness or assistance. The scammer may use official-looking documents or websites to convince the individual that the offer is legitimate.

How to Avoid Student Loan Forgiveness Scams

To avoid falling victim, it is important to recognize student loan forgiveness scams and be cautious of unsolicited offers or requests for personal information related to your student loans.

Here are some tips to avoid student loan forgiveness scams:

• Be cautious of unsolicited offers: If you receive an unsolicited offer for student loan forgiveness, be cautious and do not provide any personal information or make any payments unless you are confident the offer is legitimate.
• Verify the legitimacy of the communication: If you receive a call or email from a company claiming to offer student loan forgiveness, verify the legitimacy of the communication before responding. Check the company's website and contact information, and search for reviews or complaints online to see if the company is legitimate.
• Don't trust caller ID: Scammers may use fake or spoofed caller ID numbers to make it appear that they are calling from a legitimate company. Don't trust the caller ID and always verify the legitimacy of the caller before providing any personal information. You can also install a call blocker app to help you identify scam calls by allowing you to block unwanted calls from unknown or suspicious numbers. Some call blockers also have features that allow you to identify the caller and their location, which can help you determine if the call is legitimate or not.
• Don't pay upfront fees: Legitimate student loan forgiveness programs do not require upfront fees or payments. If a company asks for a fee to help you consolidate or refinance your student loans, it is likely a scam.
• Check the Federal Trade Commission's website: The Federal Trade Commission maintains a database of common student loan scams and provides tips on how to protect yourself. Check the FTC's website for information on current scams and how to avoid them.
• Report any suspicious activity: If you suspect that you have been contacted by a student loan scammer, report the activity to the Federal Trade Commission or your state's attorney general. This can help protect other individuals from falling victim to the same scam.