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Fraudulent companies impersonate government agencies or legitimate loan servicers, promising guaranteed student loan forgiveness or discharge in exchange for upfront fees. The FTC has recovered over $4.5 million for 34,000+ victims in 2024-2025, with scam activity spiking each time new legislation or relief programs are announced.
Annual Losses
$4.5+ million recovered by FTC (2024-2025 enforcement actions)
Avg Loss / Victim
$132 (varies; individual cases range from $45 to $2,000+)
Primary Vector
Robocalls, online ads, social media posts
Peak Season
Spikes when new legislation announced or SAVE Plan changes occur
Fraudulent companies pose as government-affiliated loan servicers or 'official' student loan relief providers, creating websites and advertising campaigns that closely mimic legitimate federal programs like the Savings on a Valuable Education (SAVE) Plan or Public Service Loan Forgiveness (PSLF). They target borrowers through robocalls ('Biden Student Loan Forgiveness Program approved'), online advertisements, and social media posts, claiming to offer guaranteed loan forgiveness, discharge, or reduced payments. To access these 'benefits,' they demand upfront fees of $500 to $2,000+ for 'application processing,' document preparation, or 'enrollment verification.' In reality, all federal student loan forgiveness applications are available for free directly through studentaid.gov. Once scammers collect fees, they either disappear entirely or provide minimal paperwork that borrowers could have completed themselves at no cost.
Hover or tap the highlighted text to see why each element is a red flag.
Biden Student Loan Forgiveness Program approvedRed flag: Scammers reference real programs and political figures to appear legitimate; creates false sense of official status. You may be eligible to have $10,000-$20,000 of your loans forgiven. Call now to apply. This offer expires soonRed flag: False urgency and artificial deadlines are classic scam tactics to prevent victims from doing research!
Text: You qualify for $0 monthly payments under SAVE. Call nowRed flag: Pressure to act immediately before the victim can research or consult with trusted advisors to process your application. $199 processing feeRed flag: Real government programs never charge application fees; this fee is the scammer's profit. Reply STOP to opt out.
Social media ad: 'Student Debt Relief ✓ Approved! You've been selectedRed flag: Creates false impression that the victim has been individually reviewed and pre-approved; scammers use this to appear legitimate for forgiveness under the new SAVE Plan. Limited slots availableRed flag: Artificial scarcity drives hasty decision-making without proper due diligence. Click here to qualify.'
Upfront fees to apply for government programs
All federal student loan forgiveness applications are completely free through studentaid.gov. Any company charging an upfront fee is a scam.
Claims of 'guaranteed' loan forgiveness or discharge
No company can guarantee forgiveness. Eligibility depends on your specific loan type and circumstances. Guarantees are a red flag.
Pressure to 'act before the deadline expires'
Real student loan programs have consistent enrollment windows. Artificial urgency and false deadlines indicate a scam.
Requests for your FSA ID login credentials
Never share your FSA ID username and password with anyone. The Department of Education will never ask for it.
Unsolicited robocalls or texts about loan forgiveness
The Department of Education does not call borrowers unsolicited. Real programs require you to apply through official channels.
Company name sounds official but isn't on the Department of Education list
Always verify your loan servicer on studentaid.gov. Legitimate servicers are listed there; scammers use convincing imitations.
Offers to 'simplify' or 'expedite' applications that are already free and simple
Applications through studentaid.gov take 15-30 minutes and cost nothing. Scammers add value that doesn't exist to justify their fees.
The Department of Education communicates through official mail, email to addresses you've verified, or calls only if you've initiated contact. Real servicers are listed at studentaid.gov and provide free application support. Real student loan programs (SAVE, PSLF, Income-Driven Repayment) are accessed directly through studentaid.gov at no cost. Applications ask for basic information (name, Social Security number, loan type) and take 15-30 minutes. Real loan servicers never call unsolicited demanding upfront fees.
Yes, potentially. Report it to your bank or credit card company immediately and request a chargeback for fraud. File an FTC complaint at reportfraud.ftc.gov with proof of payment. The FTC has recovered millions for victims through enforcement actions against fraudulent companies.
Legitimate servicers are listed on studentaid.gov, never charge upfront fees, do not call you unsolicited, and provide factual information about your specific loans. Scammers use official-sounding names, demand upfront fees, use urgency tactics, and make unrealistic promises.
Eligibility depends on your loan type, employment, and income. Visit studentaid.gov or call 1-800-4-FEDAID (1-800-433-3243) to check your eligibility for federal programs like SAVE, PSLF, or income-driven repayment plans. Never rely on a private company to determine eligibility.
Change your FSA ID password immediately at studentaid.gov. Monitor your student loan account for unauthorized changes. File an identity theft report with the FTC at identitytheft.gov. Contact your loan servicer to verify no changes were made to your account.
Go directly to studentaid.gov, log in with your FSA ID, and look for forgiveness programs matching your situation (SAVE Plan, PSLF, disability discharge, etc.). The application is free and takes 15-30 minutes. You can also call 1-800-4-FEDAID for guidance.
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