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Protect Yourself from Student Loan Forgiveness Scams

As a student loan borrower, you may be targeted by scammers. According to a 2022 report from the Tech Transparency Project, 12% of Google ads related to student loan forgiveness are fraudulent. Even though the Supreme Court rejected the Biden administration’s general loan forgiveness plan, scammers may still target borrowers in other federal loan forgiveness programs, such as the Public Service Loan Forgiveness program or income-driven repayment plans.

To avoid student loan forgiveness scams, only use the Education Department’s applications and ignore messages claiming you need to act now for student loan forgiveness. Here are the warning signs to identify student loan forgiveness scams and four ways to safeguard yourself against them.

Warning Signs of Student Loan Forgiveness Scams

While many debt relief companies provide legitimate services, others perpetuate student loan forgiveness scams that prey on unsuspecting borrowers. Here are red flags to look out for:

• Requires an upfront payment: The offer is likely a scam if you’re expected to pay an upfront fee for student loan debt relief. The Education Department never imposes fees to apply for student loan forgiveness, income-driven repayment plans, or other forms of debt relief.
• Includes unrealistic promises: Ads touting claims like “Your account has been flagged for student loan forgiveness. Call now to activate debt relief” are likely scams. If an offer sounds too good to be true, it probably is.
• Guarantees immediate results: Don’t believe anyone promising immediate forgiveness or cancellation. Most federal student loan forgiveness programs require you to make qualified payments for several years or work in specific fields, like teaching or public service occupations.
• Seeks an urgent response: Scammers may urge you to pay for their service immediately before the program is discontinued or some other time-sensitive deadline. Remember, aggressive advertising language will not come from the Education Department or its partners.
• Asks for your FSA ID password: Scammers may impersonate representatives for student loan servicers and ask for your personal information, like your FSA ID password. The Education Department and its partners will never request this information.

4 Ways to Avoid Student Loan Forgiveness Scams

Here are four ways to avoid a student loan forgiveness scam:

• Only work with the Department of Education or its affiliated partners: Apply for student loan forgiveness only through the official website at StudentAid.gov. Confirm a servicer is on the government’s list of contracted federal loan servicers before contacting them.
• Don’t respond to aggressive phone calls, texts, or emails: The Department of Education explicitly states they never send advertising-style messages. Be wary of emails coming from addresses other than noreply@studentaid.gov, noreply@debtrelief.studentaid.gov, and ed.gov@public.govdelivery.com.
• Don’t pay for student debt relief: There’s no fee to apply for federal student loan forgiveness programs. Paying a fee won’t speed up the application process, improve your odds of approval, or qualify you for a larger amount of debt forgiveness. Contact your loan servicer immediately if you’re having trouble making your student loan payments.
• Protect your personal information: Beware of emails or texts that look legitimate but ask for details about your account. Phishing scams aim to look authentic to get you to click on a link that leads to a fake site requesting your personal data. Instead of responding to these messages, contact the Department of Education or your loan servicer directly using their official phone number.

What to Do if You Think You’ve Been Scammed

If you believe you’ve been scammed, consider taking the following actions:

• Report the incident: Contact the Federal Trade Commission at 877-382-4357 or online at ReportFraud.ftc.gov. You can also report incidents to your state’s attorney general.
• Inform your servicer: Contact your federal loan servicer or private student loan lender immediately. If your loans are federal, submit a claim through the department’s website.
• Get law enforcement involved: Report the financial fraud to the FBI at 202-324-3000 or tips.fbi.gov. The Department of Justice also advises reporting fraud involving Education Department funds to the Department of Education Office of the Inspector General hotline at 800-MIS-USED (800-647-8733).
• Contact your bank: Inform your bank immediately if a fraudster tricked you out of your banking or routing number. Your bank or credit card company can stop payments to any fraudulent debt relief company.

Monitor Your Credit and Identity

Consider signing up for free credit report monitoring for real-time alerts whenever suspicious activity is detected. Additionally, Experian IdentityWorksSM scours databases and the dark web to detect your personal information. IdentityWorks also includes fraud resolution and up to $1 million in identity theft insurance, which could help you recover financially from identity theft.

For any mortgage-related needs, call O1ne Mortgage at 213-732-3074. We’re here to help you navigate your financial journey with confidence and security.

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