How To Spot Common Student Loan Forgiveness Scams?

Trying to get student loan forgiveness is a dream for many students who have student debt! Once you get a student loan forgiveness, you are rid of the pesky student loan for the rest of your life, but there is a downside to finding student debt relief! The sheer amount of scams that you can fall victim to is unbelievable. There are many student loan forgiveness scams out there, and spotting them can sometimes be a bit difficult; that is why today we will tell you a few ways to spot student loan forgiveness scams and what to do if you fall victim to them!

What are student loan scams?

Before we get into what student loan forgiveness scams are, you need to understand what a student loan scam is! Student loan scams are the types of fraud aimed at students who have taken a student loan, and these fraudsters entice students by offering them services that these scammers don't intend to fulfil and just take what they need from the students (mostly money!). They will gain your trust and then steal your money, empty your bank account, or steal your personal information, which can be a scary ordeal for many! You can also refer to our guide on how to spot and avoid student loan scams to be updated with information in 2023.

What is a student loan forgiveness scam?

Thousands of students apply for student loans almost every year, and many apply for student loan forgiveness as well, hoping their student debt is relieved! This also gives a chance to many scammers to aim at this particular group of students and offer them a sped-up forgiveness process, low monthly payments, and many more for an upfront fee. Some even contact students about CARES Act forbearance or forgiveness programs and persuade them to sign up for them. The kicker is that these kinds of programs don't exist! These student loan forgiveness scams are very common, and to prevent you from falling victim to them, here are a few ways to spot these student debt relief scams!

How to spot student loan forgiveness scams?

There are a few simple ways that you can spot a student loan forgiveness scam; these simple tactics will surely help you ward off any student debt forgiveness scams out there! All you need to do is keep your eyes and ears open!

1. You get cold calls regarding your student loan forgiveness

One of the most basic ways many fall for a student debt relief scam is by cold calls. We all get cold calls occasionally about credit cards, loans, etc. Many fall for the offer and the rewards without knowing the storm that is around the corner. A storm that will clean your bank account! If anyone calls you about student debt cancellation, listen to them and get a company name, and if you don't, cut the call and block them (easy!). If you get a company name, The next point will help you tackle that.

2. Confirm the company is working with the US Department of Education

Working in tandem with the first tip, if you get a company name from a cold call, check whether that company is a US Department of Education partner. Many students fail to do so and fall for the student loan forgiveness scam! All you need to do to ensure that you are not getting scammed is just to make sure that the company offering you an unbelievable deal is a partner of the US Department of Education! A few companies are.

1. FedLoan Servicing
2. Great Lakes Education Loan Services Inc.
3. MOHELA
4. Aidvantage
5. Nelnet
6. HESC/Edfinancial

3. Keep an eye out for common scam techniques

Student debt forgiveness scams or any scams have common mistakes that you need to watch out for. These include unusual capitalisation, incorrect grammar, or broken sentences. These are a few things that scammers are weak at and can be to your advantage! One thing to note is that the US Department of Education sends students texts regarding temporary forgiveness programs. Still, it won't be aggressive, saying it is a limited-time event or urgent, which is the perfect thing to talk about next. 

4. You get urgent or limited-time offers 

One thing to keep an eye out for when it comes to student debt relief scams is that the US Department of Education (ED) or any of its partners will never send you aggressive texts saying that there are limited-time offers for student debt relief! This tactic is played to make sure that you don't have time to research the company and make sure they are a partner to ED. The scammers use words like 'act immediately, 'as soon as possible, and 'first come, first serve.' If you receive a text with any of these words or words close to them, refer to the abovementioned point!

5. Don't pay with student loan debt relief 

Facing issues while paying your student loan is very common, and the best thing to do at that time is to contact your loan provider since a few debt relief companies can charge a service fee while your loan provider would do it for free. A few tips with repayment of student loans are not bad and can even save you from a few scams since unverified services are surely ways to get scammed!

6. The caller or company is on the FTC's list of banned companies

FTC (Federal Trade Commission) has a list of banned companies that are mostly scammers and would loot you; if you don't find a company name on the list of ED, then it would be best to check out FTC's list of banned companies since it is updated time to time, it would save you from being a victim of a student loan forgiveness scam!

7. The offer does not make sense!

Your loan provider will work with you to find the best way to repay your student loan; meanwhile, fraudsters don't think the entire plan through. They offer plans that are for their gains and not yours! Their plans have major loopholes; you can see and understand if it is a student debt relief scam or not! One example is that they offer Federal loan consolidation even though you have taken a loan from a private lender!

8. You are asked to share your Federal Student Aid credentials

One thing to never do is to share your Federal Student Aid (FSA) credentials with anyone! ED or its partners will never ask for your FSA credentials since they can directly access it! Anyone who asks for these credentials is a scammer and is looking to commit identity theft since they are trying to gain access to the National Student Loan Data System, which has all of your information! 

What to do if you are a victim of student loan forgiveness scams?

With many student loan scams going around, student loan forgiveness scams are one of the biggest ones out there. Trying to pay off your student loan early or getting forgiveness can make you a victim of a student loan forgiveness scam. There are a few things you need to do to make sure that nothing goes wrong!

1. Get in touch with your loan provider to ensure there are no actions and even revoke authorisation!
2. Contact your bank account or credit card company to stop any and all payments to the scam company.
3. Submit a complaint to the Federal Student Aid!
4. Submit a complaint to the Federal Trade Commission!
5. Finally, submit a complaint to the Consumer Financial Protection Bureau!

These are all the things to look for and do if you spot a loan forgiveness scam! There is only one thing to say now: be safe, secure, and watch for student loan scams!