Student loan forgiveness and repayment scam

The United States Department of Education announced another extension of the student loan payment moratorium, and this time, the pressure will last until August 31, 2022. This revelation brings student debts back into the spotlight, as does speculation about future loan forgiveness for all. 

Repaying the student loan debt becomes difficult due to the lack of suitable employment. The problem becomes more intense post-pandemic. Managing finances and debt repayments are daunting, and having an additional student debt could be stressful. Student loan forgiveness can be a significant relief.

Unfortunately, student loan debt relief con artists have already arrived—a federal student loan forgiveness scheme for all borrowers, which is a scam. Scammers may advertise a loan forgiveness program for which most individuals will not be eligible. 

Alternatively, they may claim that disputing your loans will wipe them away. They can't get you into a loan forgiveness program or wipe away your debts.

What is a student loan forgiveness scam?

In October of 2017, the Federal Trade Commission, working with the Attorney's General of eleven states, launched what it cleverly calls Operation Game of Loans to target these various student loan scams jointly. Some scammers promise dramatic debt reductions of 50% or more in return for upfront fees of between $500 and $2,500. Often these scam companies have names that make it appear that the federal government endorses them to trick people into trusting them. 

Another student loan scam involves promises related to consolidating student loans. Sometimes the scammers represent that they are associated with the U.S. Department of Education, although the Department of Education does not associate with private lenders regarding student loan consolidation. These scammers also charge significant fees for their student loan consolidation services when the truth is that there is no fee for legitimate student loan consolidation. 

Since the pandemic's start, a moratorium on federal student loan repayments has been extended seven times, most recently in April, with the extension now ending on August 31. The sudden resumption of payments by 40 million student loan borrowers at that time will surely prompt scammers to contact students and their families with various scams related to the repayment or forgiveness of student loans. Some scammers will be getting students posing as the student's loan servicer. 

To verify that your real loan servicer is contacting you, go to the Department of Education's federal student aid website, where you can get detailed information on your current student loan servicer, including contact information, advised Steve Weisman, a nationally recognized expert in scams, identity theft, and cybersecurity.

What is a student loan repayment scam?

Many student loan debt relief scammers promise quick loan forgiveness, which is unrealistic. You should never pay any upfront fees for student loan debt relief assistance, warned the award-winning author of a well-known book "The Truth About Avoiding Scams." Mr. Steve Weisman. Those fees are illegal and indicate that you are being scammed. Don't trust scammers merely because they use names that sound like they are affiliated with the government.

He further guided that we should never give out Federal Student Aid ID or your Social Security number to anyone who calls us representing themselves to be a student loan servicer.  Scammers can use this information to log into your student loan account, change your contact information, or even direct payments to themselves. Rather than give your Federal Student Aid ID or your Social Security number to someone contacting you when you can never be sure if they are legitimate or not, contact your servicer directly if you have any questions.

Beware of fake student loan forgiveness checks, which will bounce when you deposit them. There is no such thing as Biden Student Loan Forgiveness or Obama Student Loan Forgiveness, said financial expert Mark Kantrowitz. He suggests applying for a lower monthly student loan payment and various loan forgiveness and discharge options, for free, at

How to protect yourself from the student loan forgiveness scammers

  1. Federal loan forgiveness options are available, and public Service Loan Forgiveness (PSLF) and Teacher Loan Forgiveness programs exist. There is even a Public Service Loan Forgiveness limited waiver scheme currently in effect, with a deadline of October 31, 2022. If you doubt, contact your loan servicer or the Department of Education.
  2. Don't give out your FSA ID. Some scammers claim to need your FSA ID to assist you, but they never share it with anyone. Untrustworthy individuals could use that information to gain access to your account and steal your identity.
  3. You do not have to pay for assistance. Nothing a business can accomplish that you can't do yourself — for free. Contact your loan servicer if you have any queries regarding your loans or how you plan to repay them after the pause expires in August.
  4. Suppose a bigger federal student loan debt forgiveness scheme is implemented. In that case, the official word will come through the Department of Education, not from random phone calls, texts, emails, or social media messages.
  5. For information related to student loan repayment, you can trust the federal student loan repayment option. Go to You can learn about loan deferments, forbearance, repayment, and loan forgiveness programs, and there is never an application fee. If you owe private student loans, contact your loan servicer, Mr. Steve Weisman. You can also look into student loan refinancing rather than consolidating the loans. Refinancing student loans can result in a lower interest rate.
  6. If you believe you've now been scammed, the first thing to do is File a formal complaint with the Federal Trade Commission and modify your FSA login details as soon as possible. Additionally, ask your bank to rescind any third-party permissions or guardianship you may have initially provided to your creditor. Finally, talk to your lender and request that any transactions related to debt restructuring initiatives be stopped, said Elina Jones, the personal finance expert.


Even if you do not complete your degree, you must continue to repay your student debts. However, depending on your unique circumstances and the types of loans you have, you may be qualified for an alternate repayment plan or loan forgiveness. 

Certain companies may approach you and offer to assist you in getting pre-qualified for a particular government payment reduction or forgiveness program. When qualifying for payback and forgiveness programs, there is nothing a private firm can do for you. 

You can enroll in these programs by contacting your loan servicer. Many of these groups provide free advice. If you face any issues with your lender or servicer, you look for a reliable student loan relief organization that provides counseling. Consider student loan assistance resources from authentic sources. Look for a recognized nonprofit credit counseling agency or hire an attorney.

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