How to Avoid Student Loan Forgiveness Scams (and Find Real Options Instead)

Note that the situation for student loans has changed due to the impact of the coronavirus outbreak and relief efforts from the government, student loan lenders and others. Check out our Student Loan Hero Coronavirus Information Center for additional news and details.

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While there are legitimate student loan forgiveness programs that will cancel your student debt, there are also plenty of student loan forgiveness scams out there.

If you’ve received a call that promised to cancel your debt overnight, or simply made promises that seemed too good to be true, you’ve probably encountered a scammer.

These scammers are out to steal your money, personal information or even online identity. Read on to learn about the signs of a student loan forgiveness scam and how to protect yourself, as well as some key details to watch for, such as:

• How to block student loan robo-calls
• Steps to take if you’ve been scammed
• Why real student loan forgiveness can take a while
• Where to get legitimate student loan forgiveness
• 4 more things you need to know about student loan forgiveness
• How to pursue student loan forgiveness

Signs of student loan forgiveness scams

Although there are some legitimate student loan forgiveness programs that will cancel part or all of your debt, there are also plenty of student loan forgiveness scams.

If you’re trying to decide whether a program is real or a scam, here are a few red flags to watch out for:

1. Someone called you
2. The promise sounds too good to be true
3. You’re expected to pay upfront fees
4. You’re being asked for sensitive personal information
5. You’re feeling pressured

1. Someone called you

People who are associated with legitimate student loan forgiveness programs don’t do cold outreach. In other words, they don’t take it upon themselves to call you and tell you about the loan forgiveness program.

Instead, you can learn about these programs on the Federal Student Aid website. You can also call your student loan servicer to discuss your options.

But if someone has called you on the phone to tell you about a “new student loan relief program” (like a COVID-19 forgiveness program, which doesn’t exist), chances are you’re dealing with a student loan forgiveness scam.

If this is the case, your best bet is to hang up and do your own research from trusted sources.

2. The promise sounds too good to be true

Another sign of a student loan forgiveness scam is a promise that sounds too good to be true. Legitimate student loan forgiveness programs have fairly strict requirements and usually require years of service before canceling your debt.

The Public Service Loan Forgiveness program, for example, requires 10 years of working in public service before canceling your loans. The Teacher Loan Forgiveness program asks for five consecutive years of working in a school before providing partial loan forgiveness.

If someone is offering a fast track to student loan cancellation, the offer, while tempting, probably isn’t real.

3. You’re expected to pay upfront fees

You should never have to pay anything to apply for a real student loan forgiveness program. You can find the paperwork online or ask your loan servicer for instructions.

While there are some legitimate student loan counselors who will charge a fee for their services, you shouldn’t have to pay for the loan forgiveness itself.

That said, if you’re struggling to manage your loans on your own, you might think it’s worth it to hire outside assistance. But if someone is demanding upfront fees in exchange for student loan relief, it’s probably a scam.

4. You’re being asked for sensitive personal information

Along with stealing your money, scammers might be trying to get their hands on sensitive personal information, such as your Social Security number or bank account details.

You should never share this data over the phone with someone who reached out to you. For instance, if someone is claiming to be your loan servicer, hang up and call your servicer back via its official phone number.

That way, you’re sure that you’re dealing with the actual company, and not an impersonator.

5. You’re feeling pressured

Finally, scammers might try to use high-pressure sales tactics to get you to act fast without thinking.

But there shouldn’t be any sense of urgency around applying for loan forgiveness. It takes time to learn the ins and outs of a real program and make sure you’re meeting its requirements.

If you’re feeling pressured to make a move, take some more time to do your own independent research.

How to block student loan robocalls

Student loan robocalls, whether as part of student loan forgiveness scams or as legitimate messages from your federal loan servicer, are becoming standard fare for borrowers and non-borrowers alike. Robocall-blocking service YouMail told Student Loan Hero it counts about 165 million illegal student loan-related calls per month.

​​Here are four ways to stop them:

1. Add your number to a ‘Do Not Call’ List
2. Employ a robocall-blocking mobile app
3. Report any robocalls
4. Consider legal help

1. Add your number to a ‘Do Not Call’ List

You can register your phone number for free with the National Do Not Call Registry. The Federal Trade Commission (FTC) — the same agency that recently reimbursed 40,000 borrowers defrauded by relief scams — set up the registry in 2003.

However, as you might have suspected, it’s not unusual for student loan debt relief scammers to violate the Do Not Call Registry. Signing up might only stop legitimate telemarketers (including your real loan servicer) from calling your mobile phone or landline.

2. Employ a robocall-blocking mobile app

You might also have tried blocking a specific number using your smartphone, only to find robocalls reaching you from a different line. It’s common for spammers to call you from a number that matches your local area code.

To stop con artists and others from calling you from a variety of phone numbers, you might try robocall-blocking mobile apps such as YouMail, RoboKiller or Nomorobo. If you decide to use such a service, be sure to contact them when a robocall or text sneaks through — that could help them strengthen their security, according to the FTC.

3. Report any student loan robocalls

To ensure a spam call doesn’t happen a second time, don’t just notify your app operator, but also report the number to the FTC’s Complaint Assistant or via the Federal Communication Commission’s online form.

Likewise, if you receive a robotext, you can copy the message and send it to your smartphone carrier at 7726 (SPAM). That free service works for AT&T, T-Mobile, Verizon, Sprint and Bell customers.

While you’re at it, you could consult your carrier about the protections it offers from robocalls and texts. Here are some companies with security products and information specific to their phones:

• AT&T
• CTIA
• Google Project Fi
• T-Mobile
• U.S. Cellular
• USTelecom

4. Consider legal help

If your student loan servicer is the auto-dialing culprit, you might find that the calls or texts don’t stop, even after contacting their customer service and making your monthly loan payments.

The National Consumer Law Center cataloged such cases among the thousands of borrowers who have filed suit against their loan provider. At issue are your rights under the Telephone Consumer Protection Act (TCPA). To adhere to this law, telemarketers — even those working for loan servicers — must:

• Ask for your permission before robocalling you, and
• Include an opt-out or unsubscribe option during each robocall

If your rights are being violated, keep a record of your unwanted calls and voicemails. You might even seek a student loan lawyer. Consider the case of a Pennsylvania man who won a nearly $300,000 judgment after he sued Navient in 2017 for excessive robocalls.

Steps to take if you’ve been scammed

If you’ve fallen victim to a student loan scam, you may contact:

• Your bank or credit card company: You could seek to stop the payment to the scammer if you paid a fee upfront.
• The three major credit bureaus: You could report fraud or freeze your credit report to avoid future harm.
• The Office of Inspector General: You could ask for advice if your student loan information was compromised.
• The Consumer Financial Protection Bureau (CFPB): You could report the business and submit a complaint.

Why real student loan forgiveness can take a while

While there are legitimate student loan forgiveness programs out there, none of them will forgive your debt overnight. In fact, getting loan forgiveness is a lengthy process that only applies under certain circumstances.

It’s also only available for federal loans; forgiveness for private student loans doesn’t exist. So if someone is promising to erase your debt with a private lender, it could be a student loan forgiveness scam.

The only exception is student loan repayment assistance programs (LRAPs), which sometimes give you financial assistance to pay off both your federal and private loans. These typically come from a state or private organization. You can check out a long list of LRAPs here.

Where to get legitimate student loan forgiveness

As mentioned, these six options are only for federal student loans — you’ll have to try an LRAP for your private debt.

1. Income-driven repayment
2. Public Service Loan Forgiveness
3. Teacher Loan Forgiveness
4. Total and Permanent Disability Discharge
5. Perkins Loan cancellation
6. Student loan forgiveness or cancellation by profession

1. Income-driven repayment

The Federal Student Aid (FSA) office offers four IDR repayment plans:

• Income-Based Repayment (IBR)
• Pay As You Earn (PAYE)
• Revised Pay As You Earn (REPAYE)
• Income-Contingent Repayment (ICR)

All these plans adjust your payments in accordance with your income. If you still have a balance at the end of your repayment term, the remainder will be forgiven.

• Maximum monthly payment: Generally 10%, 15% or 20% of your discretionary income, depending on the plan and when you borrowed
• Loans are forgiven: After 20 or 25 years of payments

2. Public Service Loan Forgiveness

The Public Service Loan Forgiveness (PSLF) is an option for professionals who work in public service. After 10 years of service, your loans will be forgiven.

But make sure you meet all the requirements of the program and submit an Employment Certification form each year. You wouldn’t want to get to the end of your 10 years only to find out you weren’t eligible for the program (as many borrowers found out the hard way).

• Maximum monthly payment: Dependent on your repayment plan, but you’ll need to put your loans on an IDR plan
• Loans are forgiven: After 10 years of payments on an IDR plan while working in a qualifying public service job

3. Teacher Loan Forgiveness

The Teacher Loan Forgiveness program is available for teachers who work in low-income schools or qualifying educational agencies. Through this program, you could get up to $17,500 in loan forgiveness, depending on what subject you teach.

• Loans are forgiven: After five consecutive years of qualifying work
• Loan forgiveness amount: Up to $17,500 for full-time, highly qualified teachers of math, science or special education; up to $5,000 for full-time highly qualified teachers of other subjects

4. Total and Permanent Disability Discharge

If you experience a total and permanent disability, you could qualify to get your entire federal student loan balance canceled. You might also be eligible for loan cancellation if you die or go bankrupt, or if your school closed or made fraudulent claims. You can read more about these student loan discharge programs here.

• Loans are forgiven: Upon proof of total and permanent disability

5. Perkins Loan cancellation

Although the Perkins loan program ended in September 2017, some borrowers still have Perkins loans that they borrowed before this time. If you do, you could get your Perkins loan canceled if you work in a qualifying profession for a certain period of time.

• Loans are forgiven: Upon proof of employment in a qualifying service career

6. Student loan forgiveness or cancellation by profession

Lastly, you’ll find other forgiveness programs for particular professions. Here are comprehensive student loan forgiveness guides for:

• Military
• Law enforcement
• Doctors, nurses and physician assistants
• Dentists
• Professors and teachers
• Lawyers
• Pharmacists
• Veterinarians
• Accountants
• Psychologists

4 more things you need to know about student loan forgiveness

Is federal student loan forgiveness real? Yes, with some caveats:

1. Not everyone is eligible
2. Forgiveness takes a long time
3. Your remaining loans might be taxed
4. It’s not always worth it

1. Not everyone is eligible

To be eligible for some income-driven repayment plans, for example, your payments must be lower than what they’d be under the standard 10-year repayment plan.

Say you earn $30,000 per year as a social worker but have $80,000 in debt because of your master’s degree. Tying your loan repayment to your income would keep your payments lower over a longer period. It would cost you more to repay the loan unless you qualified for loan forgiveness.

2. Forgiveness takes a long time

Depending on which program you’re pursuing, your student loans might not be forgiven for decades. In that time, you’ll pay more in interest than under the standard plan.

And remember: When it comes time to finally get your loans forgiven, your remaining balance might not be all that big.

3. Your remaining loans might be taxed

In the eyes of the Internal Revenue Service, a student loan that’s forgiven at the end of an IDR repayment plan is typically considered to be taxable income. So if you eventually manage to have $50,000 worth of loans forgiven, you might be on the hook for paying federal (and possibly state) taxes on that amount.

That said, the Biden-Harris administration waived taxes on forgiven student loans until 2025 with the American Rescue Plan, so you won’t have to worry about this tax bill if you receive loan forgiveness before then.

4. It’s not always worth it

As noted above, you might pay significantly more in interest if you opt for forgiveness through an IBR plan. Run your numbers through our IBR calculator to see exactly how much.

Since many student loan forgiveness programs require you to work in public service, you’ll likely earn a lower salary than you would in the private sector. You’d almost certainly earn a higher income as a lawyer for a firm representing name-brand clients than you would as an attorney for the government, for example.

How to pursue student loan forgiveness

If you’re struggling to repay your loans and think forgiveness is the right path for you, read our comprehensive guide to student loan forgiveness. See if you qualify for any existing options.

If none of the legitimate federal programs apply to your situation, consider putting your loans into deferment or forbearance. You may also refinance your loans with a private lender.

Along the way, be on the lookout for student loan forgiveness scams that are after your money, not your well-being.

Whatever you do, don’t ignore your loans. Because that’s the one way to ensure they never disappear.

Andrew Pentis and Susan Shain contributed to this post.

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	2.24% – 9.23%7	Undergrad & Graduate	Visit Citizens
Check out the testimonials and our in-depth reviews! 1 Important Disclosures for Laurel Road. Laurel Road Disclosures All credit products are subject to credit approval. Laurel Road began originating student loans in 2013 and has since helped thousands of professionals with undergraduate and postgraduate degrees consolidate and refinance more than $9 billion in federal and private school loans. Laurel Road also offers a suite of online graduate school loan products and personal loans that help simplify lending through customized technology and personalized service. In April 2019, Laurel Road was acquired by KeyBank, one of the nation’s largest bank-based financial services companies. Laurel Road is a brand of KeyBank National Association offering online lending products in all 50 U.S. states, Washington, D.C., and Puerto Rico. All loans are provided by KeyBank National Association, a nationally chartered bank. Member FDIC. For more information, visit www.laurelroad.com. As used throughout these Terms & Conditions, the term “Lender” refers to KeyBank National Association and its affiliates, agents, guaranty insurers, investors, assigns, and successors in interest. Checking your rate with Laurel Road only requires a soft credit pull, which will not affect your credit score. To proceed with an application, a hard credit pull will be required, which may affect your credit score. Savings vary based on rate and term of your existing and refinanced loan(s). Refinancing to a longer term may lower your monthly payments, but may also increase the total interest paid over the life of the loan. Refinancing to a shorter term may increase your monthly payments, but may lower the total interest paid over the life of the loan. Review your loan documentation for total cost of your refinanced loan. After loan disbursement, if a borrower documents a qualifying economic hardship, we may agree in our discretion to allow for full or partial forbearance of payments for one or more 3-month time periods (not to exceed 12 months in the aggregate during the term of your loan), provided that we receive acceptable documentation (including updating documentation) of the nature and expected duration of the borrower’s economic hardship. During any period of forbearance interest will continue to accrue. At the end of the forbearance period, any unpaid accrued interest will be capitalized and be added to the remaining principle amount of the loan. Automatic Payment (“AutoPay”) Discount: if the borrower chooses to make monthly payments automatically from a bank account, the interest rate will decrease by 0.25% and will increase back if the borrower stops making (or we stop accepting) monthly payments automatically from the borrower’s bank account. The 0.25% AutoPay discount will not reduce the monthly payment; instead, the discount is applied to the principal to help pay the loan down faster. Assumptions: Repayment examples above assume a loan amount of $10,000 with repayment beginning immediately following disbursement. Repayment examples do not include the 0.25% AutoPay Discount. Annual Percentage Rate (“APR”): This term represents the actual cost of financing to the borrower over the life of the loan expressed as a yearly rate. Interest Rate: A simple annual rate that is applied to an unpaid balance. Variable Rates: The current index for variable rate loans is derived from the one-month London Interbank Offered Rate (“LIBOR”) and changes in the LIBOR index may cause your monthly payment to increase. Borrowers who take out a term of 5, 7, or 10 years will have a maximum interest rate of 9%, those who take out a 15 or 20-year variable loan will have a maximum interest rate of 10%. KEYBANK NATIONAL ASSOCIATION RESERVES THE RIGHT TO MODIFY OR DISCONTINUE PRODUCTS AND BENEFITS AT ANY TIME WITHOUT NOTICE. This information is current as of April 29, 2021. Information and rates are subject to change without notice.   2 Important Disclosures for LendKey. LendKey Disclosures Refinancing via LendKey.com is only available for applicants with qualified private education loans from an eligible institution. Loans that were used for exam preparation classes, including, but not limited to, loans for LSAT, MCAT, GMAT, and GRE preparation, are not eligible for refinancing with a lender via LendKey.com. If you currently have any of these exam preparation loans, you should not include them in an application to refinance your student loans on this website. Applicants must be either U.S. citizens or Permanent Residents in an eligible state to qualify for a loan. Certain membership requirements (including the opening of a share account and any applicable association fees in connection with membership) may apply in the event that an applicant wishes to accept a loan offer from a credit union lender. Lenders participating on LendKey.com reserve the right to modify or discontinue the products, terms, and benefits offered on this website at any time without notice. LendKey Technologies, Inc. is not affiliated with, nor does it  endorse,  any educational institution. Subject to floor rate and may require the automatic payments be made from a checking or savings account with the lender. The rate reduction will be removed and the rate will be increased by 0.25% upon any cancellation or failed collection attempt of the automatic payment and will be suspended during any period of deferment or forbearance. As a result, during the forbearance or suspension period, and/or if the automatic payment is canceled, any increase will take the form of higher payments. The lowest advertised variable APR is only available for loan terms of  5 years and is reserved for applicants with FICO scores of at least 810. As of 5/17/2022 student loan refinancing rates range from 2.05% APR – 5.25% Variable APR with AutoPay and 2.49% APR – 7.93% Fixed APR with AutoPay. 3 Important Disclosures for Navient. Navient Disclosures You can choose between fixed and variable rates. Fixed interest rates are 3.49% – 8.24% APR (3.24% – 7.99% APR with Auto Pay discount). Starting variable interest rates are 2.14% APR to 8.24% APR (1.89% – 7.99% APR with Auto Pay discount). Variable rates are based on an index, the 30-day Average Secured Overnight Financing Rate (SOFR) plus a margin. Variable rates are reset monthly based on the fluctuation of the index. We do not currently offer variable rate loans in AK, CO, CT, HI, IL, KY, MA, MN, MS, NH, OH, OK, SC, TN, TX, and VA. 4 Important Disclosures for SoFi. SoFi Disclosures Fixed rates range from 3.99% APR to 8.24% APR with a 0.25% autopay discount. Variable rates from 2.24% APR to 7.99% APR with a 0.25% autopay discount. Unless required to be lower to comply with applicable law, Variable Interest rates on 5-, 7-, and 10-year terms are capped at 8.95% APR; 15- and 20-year terms are capped at 9.95% APR. Your actual rate will be within the range of rates listed above and will depend on the term you select, evaluation of your creditworthiness, income, presence of a co-signer and a variety of other factors. Lowest rates reserved for the most creditworthy borrowers. For the SoFi variable-rate product, the variable interest rate for a given month is derived by adding a margin to the 30-day average SOFR index, published two business days preceding such calendar month, rounded up to the nearest one hundredth of one percent (0.01% or 0.0001). APRs for variable-rate loans may increase after origination if the SOFR index increases. The SoFi 0.25% autopay interest rate reduction requires you to agree to make monthly principal and interest payments by an automatic monthly deduction from a savings or checking account. This benefit will discontinue and be lost for periods in which you do not pay by automatic deduction from a savings or checking account. The benefit lowers your interest rate but does not change the amount of your monthly payment. This benefit is suspended during periods of deferment and forbearance. Autopay is not required to receive a loan from SoFi. 5 Rate range above includes optional 0.25% Auto Pay discount. Important Disclosures for Earnest. Earnest Disclosures Student Loan Refinance Interest Rate Disclosure Actual rate and available repayment terms will vary based on your income. Fixed rates range from 3.49% APR to 8.24% APR (excludes 0.25% Auto Pay discount). Variable rates range from 2.14% APR to 8.24% APR (excludes 0.25% Auto Pay discount). Earnest variable interest rate student loan refinance loans are based on a publicly available index, the 30-day Average Secured Overnight Financing Rate (SOFR) published by the Federal Reserve Bank of New York. The variable rate is based on the rate published on the 25th day, or the next business day, of the preceding calendar month, rounded to the nearest hundredth of a percent. The rate will not increase more than once per month. The maximum rate for your loan is 8.95% if your loan term is 10 years or less. For loan terms of more than 10 years to 15 years, the interest rate will never exceed 9.95%. For loan terms over 15 years, the interest rate will never exceed 11.95%. Please note, we are not able to offer variable rate loans in AK, IL, MN, NH, OH, TN, and TX. Our lowest rates are only available for our most credit qualified borrowers and contain our .25% auto pay discount from a checking or savings account.  6 Important Disclosures for Purefy. Purefy Disclosures Purefy Student Loan Refinancing Rate and Terms Disclosure: Annual Percentage Rates (APR) ranges and examples are based on information provided to Purefy by lenders participating in Purefy’s rate comparison platform. For student loan refinancing, the participating lenders offer fixed rates ranging from 2.73% – 7.99% APR, and variable rates ranging from 1.74% – 7.99% APR. The maximum variable rate is 25.00%. Your interest rate will be based on the lender’s requirements. In most cases, lenders determine the interest rates based on your credit score, degree type and other credit and financial criteria. Only borrowers with excellent credit and meeting other lender criteria will qualify for the lowest rate available. Rates and terms are subject to change at any time without notice. Terms and conditions apply.   7 Important Disclosures for Citizens. CitizensBank Disclosures Education Refinance Loan Rate Disclosure: Variable interest rates range from 2.24%-9.23% (2.24%-9.23% APR). Fixed interest rates range from 4.29%-9.73% (4.29%-9.73% APR).  Undergraduate Rate Disclosure: Variable interest rates range from 5.37%- 8.81% (5.37% – 8.81% APR). Fixed interest rates range from 5.87% – 9.31% (5.87% – 9.31% APR). Graduate Rate Disclosure: Variable interest rates range from 2.24% – 8.75% (2.24% – 8.75% APR). Fixed interest rates range from 4.29% – 9.25% (4.29% – 9.25% APR). Education Refinance Loan for Parents Rate Disclosure: Variable interest rates range from 2.24%- 8.40% (2.24%- 8.40% APR). Fixed interest rates range from 4.29% – 8.90% (4.29% – 8.90% APR).  Medical Residency Refinance Loan Rate Disclosure: Variable interest rates range from 2.24% – 8.75% (2.24% – 8.75% APR). Fixed interest rates range from 4.29% – 9.25% (4.29% – 9.25% APR).