Student loan forgiveness plans have been in flux — and criminals are trying to cash in on the confusion. Fraudsters may pose as government agents, financial advisors, or loan servicers in order to trick people into sharing money or personal information in exchange for loan forgiveness. But any promise of an easy way out of debt is likely a scam.

Did you know that some 42.8 million Americans have student loan debt?

If you or someone you love is one of them, it's important to know about scams that offer debt forgiveness — for a price.

To stay safe, know that you shouldn’t have to pay anyone to obtain debt relief, and any promise for an easy way out of a loan is likely a scam. 

Why are student loan scams surging?

In the past few years, student loan forgiveness has been in flux.

In August of 2022, the government announced plans for a one-time student debt forgiveness program. Shortly after, the program was blocked by a court order — and ultimately, the Supreme Court officially ruled against the plan.

The Department of Education continues to propose new ways to make student loan debt repayment more manageable, but for now, federal student loan payments are set to resume in October.

The landscape of student loan forgiveness may continue to shift. Given this, experts warn that scammers will likely continue to capitalize on the confusion.

How might student loan scammers contact you?

In a survey conducted on behalf of Allstate by Morning Consult, 40 percent of people who reported being targeted by a student loan scam said they've been contacted by fraudsters at least once a week.

Similar to other impersonation scams, fraudsters may reach out via email or text with promises of student debt relief.

Student loan phone scams are common, too. Wondering what fraudsters might say if they get you on the line? Listen to this NPR report that features real voicemails left by student loan scammers.

Finally, criminals may use search engines and social media ads to lure people to phony websites offering student debt relief. Those who are actively searching for updates and information on student loans may be vulnerable to these phishing campaigns. 

3 ways to spot a student loan scam 

Student loan scams usually begin with someone claiming to work for the Department of Education — or a third-party company — saying that they can help you apply for or receive student loan forgiveness. They often charge a fee to do so — money that you won’t get back.

Fortunately, certain things can tip you off to student loan scams like these. Here are some general red flags to watch out for:

  • Unsolicited requests for your (or your child’s) FSA ID: Vera Tolmachoff, Restoration Manager at Allstate Identity Protection, says that an FSA ID should be guarded as personal and sensitive information. The same applies to your Social Security number. “Any request for this information is a major signal that you’re being scammed,” says Tolmachoff. According to the Department of Education, a student’s FSA ID — which is the username and password created to complete a FAFSA (Free Application for Federal Student Aid) form — has the same legal status as a signature. That’s why you should never share your FSA ID with anyone, not even a family member or close friend, and especially not a stranger.

  • Calls or texts from the “Department of Education”: Similar to the International Revenue Service (IRS), the Department of Education will never call or text you to initiate a conversation about loan forgiveness. There are federal loan servicers that work on behalf of the Department of Education. These servicers are assigned to you once your loan amount has been disbursed to help manage the repayment process. However, if someone claiming to work with your loan servicer offers to expedite or guarantee loan forgiveness, you should end communication immediately. The same goes if someone guarantees that they can get you or your child a scholarship or grant in exchange for a fee.

  • Urgent requests or threats: Imposter scams often rely on scare tactics that pressure you to “act now!” They might say something along the lines of: “Your eligibility for student loan forgiveness expires in 48 hours; call us back now to apply.” The Better Business Bureau (BBB) reported that in some scams, the fraudster might even get ahold of personal information about victims before contacting them — like their name, graduation date, and other details from their FAFSA form — making the message especially convincing. If you receive a communication like this, simply hang up or delete the message.

Quick Guide

Steer clear of student loan scams

Be wary of: 

  • Any offer to apply for debt relief programs on your behalf

  • Any urgent request to “act now!” for immediate loan forgiveness

  • Calls or texts claiming to be from the Department of Education

Safety tips for current and prospective student loan borrowers

“A good rule of thumb to make sure you’re protecting yourself — especially when it comes to student loan scams — is to make sure you’re visiting the appropriate and official pages put out by government entities,” says Tolmachoff. That applies to debt relief options for teachers and government and non-profit employees.

If you have questions about student loan forgiveness, you should contact your loan servicer directly. If you’re having trouble remembering yours, Federal Student Aid (FSA) recommends that you visit your account dashboard and scroll down to the “My Loan Servicers” section, or call the FSA Information Center at 1-800-433-3243.

What to do if you're a victim of a student loan scam

If you think you've been scammed and you’re an Allstate Identity Protection member, give us a call right away. We’re here to walk you through the issue you’re experiencing and advise on next steps.

If you’re not a member, the FSA office urges you to take action and consider these next steps:  

  • Change your FSA ID and don’t share your new one with anyone

  • Contact your loan servicer to revoke any fraudulent power of attorney or third-party authorization agreement that may have been added to your file

  • Contact your bank if you have already paid a phony student loan debt relief company, and request that any future payments be stopped