Avoid Student Loan Relief Scams

Are you receiving enticing offers for your student loans? Know the warning signs to avoid becoming a victim to scams.

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With the end of the COVID-19 Loan Payment Pause, countless student loan borrowers will soon be responsible for making payments again. Unfortunately, scammers are capitalizing on the confusion that surrounds student loan policy and potential forgiveness.

Those seeking assistance from debt relief companies should be aware of the warning signs for deceptive practices along with no-cost options for federal student loans.

Warning Signs

Upfront Costs

Being charged for a service that hasn’t yet been rendered is a red flag. Companies that ask for payment upfront want to pocket money for a service they won’t provide, or a job they won’t complete.

Additionally, debt relief companies may charge you for the convenience of doing something you can do yourself at no cost. Through the Department of Education, borrowers can consolidate federal loans or choose a repayment plan based on income or other factors. Visit Federal Student Aid to learn more and apply.

Immediate Forgiveness

Promising to eliminate your debt after an initial consultation is unreasonable. You must first apply with the Department of Education to make changes to federal loans, like with consolidation or moving to an income-based repayment plan. Only the creditor has the ability to forgive your debt or modify your payment schedule.


Pay close attention to the interactions you have with a company and how you find them. Aggressive advertisements or targeted invitations are a sign that a company is seeking profits. If you feel any pressure to sign up or you’re told that an offer is temporary, end the discussion. Any company that truly wants to help you will give you time to make a decision.


Your FSA ID, used to log in to the Department of Education systems, serves as your signature for legally binding electronic documents. It’s for your exclusive use and sharing your FSA ID with a commercial entity could result in penalties.

If a debt relief company asks you to provide your FSA ID username or password, don’t. Not only is this against the rules, you also take the risk of losing access to your account, having changes made without consent, becoming a victim of fraud, and so forth. Any legitimate company won’t ask for this.

The Facts

The best way to know whether you’re being scammed is to recognize the legitimacy of what you’re being told. Don’t fall for fabricated promises; know that there are only a few ways in which federal loans may be forgiven, cancelled, or discharged. In fact, the full list is made available on Federal Student Aid. Teachers, public servants, and disabled persons are among those that may qualify.


Always remember, if an offer sounds too good to be true, it likely is. Click here for more information from Federal Student Aid on avoiding scams.

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Life Guidance for:

After College Graduation

If you have student loans, you’ll need to prepare for repayment when the time comes. Use our resources to explore everything from repayment plans to loan forgiveness and relief.

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