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How to Spot Student Loan Relief Fraud (Spoiler: If You're Asked to Do Anything, It's a Scam)

It's been a busy few years for student loan relief announcements. According to the U.S. Department of Education (ED), nearly 4.8 million borrowers have been impacted by the $168 billion in student loan relief since the beginning of the Biden-Harris administration.1 That total could grow to 30 million borrowers if the latest round of student loan relief rules, first proposed in April 2024, are finalized.

But where student loan borrowers see potential relief, scammers see an opportunity. Any time a large number of people are impacted by governmental financial policy, fraudsters look for ways to take advantage. The IRS has investigated $8.9 billion in fraud stemming from COVID-19 relief funding through the CARES Act, having indicted 795 scammers as of February 2024.2 Even everyday financial government business is a popular target; scammers rerouted approximately 2,000 social security beneficiaries' payments to themselves in 2023.3

That's why the Federal Trade Commission (FTC) is warning consumers about the potential for scammers to exploit the ongoing wave of student loan relief. Here's what borrowers should know about student loan forgiveness scams and how to avoid a becoming victim. Spoiler alert: You shouldn't have to take any action to receive most of the new waves of student loan forgiveness, so anyone who says otherwise, is likely a scammer.


How Student Loan Forgiveness Scams Can Happen

Financial fraudsters are creative, so student loan relief scams could take a variety of forms. A criminal could call someone anticipating student loan forgiveness telling them they qualify — and then requesting sensitive information, like their social security number or federal student aid ID, to process their paperwork.

Similarly, borrowers could receive emails or text messages urging them to apply for loan relief using a phony website intended to capture their personal or financial information. Other scammers may ask for a fee to supposedly process loan relief forms.


How to Avoid Student Loan Relief Fraud

The Federal Student Aid Office offers the following red flags for student aid fraud:4

  • Aggressive or urgent language. Scammers often say consumers need to act fast or miss an opportunity to apply for aid or loan relief. Loan relief is never "first come, first served."
  • Too-good-to-be-true claims. Government loan forgiveness programs require years of making student loan payments or working in certain fields. If someone asks for a fee to wipe out loans that wouldn't otherwise qualify, it's a sure sign of a scam.
  • Requests for log-in info. The government will never ask borrowers for their StudentAid.gov account information. 
  • Messages with typos. Though increasingly smart AI tools may make this red flag less common, misspellings, improper capitalization or grammar, or other typos indicate a message did not come from an official source.
  • Unofficial contact info. Email addresses, phone numbers and URLs should match identifiable contact information from the ED website. Authentic government emails will come from noreply@studentaid.gov, noreply@debtrelief.studentaid.gov and edu.gov@public.govdelivery.com, and texts from 227722 and 51592. 
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For borrowers who qualify, the new student loan relief should happen automatically. Offers to help you apply are almost surely a scam.

ED urges anyone who believes they were contacted by a scammer to report the incident to the FTC at 1-877-382-4357 or reportfraud.ftc.gov.


How Student Loan Forgiveness Really Works

The best way to avoid student loan forgiveness fraud is to understand how these relief programs really work. In short, the government does all the work, and consumers shouldn't have to take any action at all. Here's what borrowers should know:5


What To Do If You're a Victim of Student Loan Relief Fraud

If you believe you've fallen victim to a student loan relief fraud, take action immediately.

  • Contact your banks, lenders and credit card companies and let them know you believe you are a victim of fraud.
  • File a fraud alert at one of the three credit reporting bureaus, Equifax,9 Experian,10 or TransUnion.11 You can also freeze your report, which would prevent anyone (including you) from opening new credit accounts in your name until you remove the freeze.
  • File a complaint with the FTC at identitytheft.gov, and leverage agency resources to create a personal fraud recovery plan.12
  • File a police report with your local police or sheriff's office. They can take a formal report and pass the information along to other agencies.
  • File a report with the FBI's Internet Crime Complaint Center (IC3),13 which will evaluate your fraud claim and pass it along to any federal, state and local authorities or agencies with jurisdiction.
  • Keep copies of all your contacts, reports and responses.
  • Check your credit report regularly. All three credit reporting bureaus are now offering consumers free weekly credit reports.14

For student loan borrowers, the promise of potential relief can be exciting — and the wait to find out if one qualifies can also be understandably excruciating. But the fact that legitimate student loan relief will happen automatically only underlines the point that if anyone offers to help facilitate student loan relief in any way, it is almost certainly a scam.

Important disclosure information

This content is general in nature and does not constitute legal, tax, accounting, financial or investment advice. You are encouraged to consult with competent legal, tax, accounting, financial or investment professionals based on your specific circumstances. We do not make any warranties as to accuracy or completeness of this information, do not endorse any third-party companies, products, or services described here, and take no liability for your use of this information.

  1. U.S. Department of Education, "Biden-Harris Administration Takes Next Step Toward Additional Debt Relief for Tens of Millions of Student Loan Borrowers This Fall," published July 31, 2024, accessed August 6, 2024. Back
  2. IRS, "IRS Criminal Investigation releases updated COVID fraud statistics on 4th anniversary of CARES Act; nearly $9 billion investigated," published March 28, 2024, accessed August 6, 2024. Back
  3. Tara Siegel Bernard, "How Fraudsters Break Into Social Security Accounts and Steal Benefits," New York Times, published March 9, 2024, accessed August 6, 2024. Back
  4. Federal Student Aid, "How to Avoid Student Loan Forgiveness Scams," accessed August 6, 2024. Back
  5. Federal Student Aid, "Federal Student Loan Debt Relief," accessed August 6, 2024. Back
  6. Federal Student Aid, "Income-Driven Repayment (IDR) Plan Request," accessed August 6, 2024. Back
  7. Federal Student Aid, "Federal Student Loan Debt Relief: How does an institution fail ED’s accountability standards for institutions?", accessed August 6, 2024. Back
  8. Collin Binkley, "What to know about Biden’s latest attempt at student loan cancellation," AP News, published April 8, 2024, accessed August 6, 2024. Back
  9. Equifax, "Fraud and Active Duty Alerts," accessed August 6, 2024. Back
  10. Experian, "Fraud Alert," accessed August 6, 2024. Back
  11. TransUnion, "Fraud Alert," accessed August 6, 2024. Back
  12. Federal Trade Commission (FTC), "IdentityTheft.gov," accessed August 6, 2024. Back
  13. FBI, "Internet Crime Complaint Center (IC3)," accessed August 6, 2024. Back
  14. AnnualCreditReports.com, "3 steps to your free credit report," accessed August 6, 2024. Back