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Watch Out! Student Loan Forgiveness Scams

Taylor Miranda



Affordable Los Angeles Nursing School

Paying back your student loans seems daunting... So, what would you do if someone told you they could reduce or completely eliminate your student loan debt? Would you trust them? 

If you said "No"... You made the right choice! 

If you said "Yes"... You need to be more careful of who to trust! Keep reading to find out why...

1. The Scams 

Consumers receive a phone call, email, or view a social media post claiming someone can get rid of student loan debt. Many companies allege their service is made possible by a new government program or policy sponsored by former U.S. President Barak Obama.

The company will ask for an upfront fee to negotiate with your student loan lender on your behalf. They will claim they've helped numerous other clients, but don't believe them! Student loans can only be forgiven under certain circumstances, and are rarely fast or easy.  These scammers will take your fee and disappear. 

An alternative version of the student loan scam has con artists assert that they can save you money by consolidating your loans. Some will charge a fee for using a free government service. Others may actually move your loans to a private lender at a higher interest rate. 

2. Red Flags

Didn't catch the red flags in the situations above? We've listed them for you here: 

  • Receiving a phone call, email, or viewing post on social media from a nonfederal organization and/or person. 
  • The organization/person offering a signification reduction or complete elimination of student loans. 
  • The organization/person offering to consolidate your loans
  • Being asked an upfront fee as a "service charge" for negotiating with student loan lender(s) or consolidating loans.  

3. Protect Yourself  

The Better Business Bureau (BBB) offers the following advice: 

  • Never pay upfront. Real lenders will take a percentage once their service is complete. You don't need to pay an upfront fee beforehand. 
  • If you are having trouble paying your student loans, contact your lender directly. You can research programs offered by the federal government.
  • Never give a third party power of attorney. Don't sign anything giving a company the power to negotiate on your behalf. A scam company can use this to take control over your loans. 
  • If it seems too good to be true... It probably is. Any company that claims it can completely erase your student loan debt is likely a scam.


BBB: "BBB alerts consumers to student loan forgiveness scams" 

Federal Student Aid: Forgiveness, Cancellation, and Discharge


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