Student Loan Scams: What Borrowers Should Watch For
Scammers often show up when student loan rules change. If someone promises fast forgiveness, asks for an upfront fee, pressures you to act immediately, or asks for your FSA ID or password, stop and verify through an official source first.
Scammers follow confusion. Verify before you pay.
When student loan policies change — like the end of the SAVE Plan or new repayment rules — scammers take advantage of the confusion. They may contact you by phone, email, text, or social media pretending to be from the government, your loan servicer, or a "debt relief" company. Federal law prohibits companies from charging advance fees for student loan debt relief services before performing any work, but scammers ignore this law.
Fake forgiveness and relief offers
Scammers may claim they can get your loans forgiven quickly, reduce your balance, or enroll you in a special program — for a fee. Federal student loan help is free. You never need to pay a company to access federal repayment plans, forgiveness programs, or deferment options.
What the scammer may say
"We can get your loans forgiven in 30 days. Just pay a one-time processing fee of $499 to get started."
Red flags
- Promises of fast or guaranteed forgiveness
- Requests for upfront fees before any service is provided
- Pressure to act immediately or lose access
- Asks for your FSA ID or password
- Uses official-looking seals, logos, or caller IDs
What to do instead
Do not pay. Do not share your FSA ID or password. Go directly to StudentAid.gov or contact your loan servicer directly to explore your options. All federal repayment plans and forgiveness programs can be accessed for free.
Impersonation of servicers or the Department of Education
Scammers may impersonate your loan servicer, the Department of Education, or StudentAid.gov. They may use spoofed phone numbers, official-looking emails, or fake websites to trick you into sharing personal information or making payments to the wrong account.
What the scammer may say
"This is an urgent notice from the Department of Education. Your student loans are about to be placed in collections unless you verify your account immediately."
Red flags
- Unsolicited calls or messages claiming to be from the government
- Threats of immediate collections or legal action
- Requests to verify your identity by providing your SSN, FSA ID, or bank details
- Links to websites that look official but have slightly different URLs
What to do instead
Hang up. Go directly to StudentAid.gov (type it into your browser yourself) or call your servicer using the number listed on your official billing statement or on StudentAid.gov.
Borrower protection checklist
Verify Before You Act
- Do not click links in unexpected emails or texts about your student loans
- Go directly to StudentAid.gov or your servicer's official website
- Do not pay upfront fees for federal student loan help — it is always free
- Do not share your FSA ID or password with anyone
- Be cautious of official-looking seals, logos, and caller IDs — these can be faked
- Confirm any payment or account change appears in your official account before trusting it
- Report suspicious messages to the authorities listed below
What not to share
Balance On Hand never asks for sensitive information
Balance On Hand is a cash-flow planning tool. It does not access your student loan account. It will never ask for your FSA ID, password, Social Security Number, or bank account information. All data you enter into the app stays on your device unless you choose to enable optional backup.
Report suspicious activity
If you believe you've been contacted by a scammer or have already shared information, report it:
Official Reporting Links
- Federal Trade Commission (FTC) — Report Fraud →
- Consumer Financial Protection Bureau (CFPB) — Submit a Complaint →
- StudentAid.gov — Report Student Loan Scams →
- Department of Education Office of Inspector General (ED OIG) →
- Your state Attorney General's office — search for "[your state] attorney general consumer complaint"
- Your loan servicer — let them know if someone is impersonating them
Official sources
StudentAid.gov — Avoiding Scams
The U.S. Department of Education's official guidance on recognizing and avoiding student loan scams.
Visit StudentAid.gov →FTC — Student Loan Scams
The Federal Trade Commission's consumer alert on student loan relief scams.
Visit FTC.gov →CFPB — Student Loan Information
The Consumer Financial Protection Bureau's resources for student loan borrowers.
Visit CFPB.gov →If you choose...
If you choose to verify first:
- You protect your FSA ID, passwords, and personal information
- You avoid paying fees for services that are free through StudentAid.gov
- You maintain control over your student loan account
- You can report the scam and help protect other borrowers
If you choose to trust an unsolicited contact:
- You may pay hundreds or thousands for services that are free
- Scammers with your FSA ID can change your repayment plan or contact info
- Your personal information may be sold to other scammers
- You may miss actual legitimate deadlines while waiting for the scam to "work"
Here's what you can do today
- If you received a suspicious contact, do not respond. Go directly to StudentAid.gov instead.
- If you already shared your FSA ID, change your password immediately at StudentAid.gov.
- Report the scam to the FTC and the CFPB.
- Verify your loan servicer and any recent changes to your account on StudentAid.gov.
- Use Balance On Hand to plan your verified payment — no FSA ID or bank login needed.
Before making a financial decision, understand your cash flow.
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