How to Spot Student Loan Scams

The confusion around student loans in 2025 has created a hunting ground for scammers. This guide gives you the complete red flags checklist, teaches you how to verify legitimate contacts, and shows you where to report fraud.

The Red Flags Checklist

If you encounter any of these, you're likely dealing with a scammer:

• Upfront fees
  They ask for payment before providing services. Federal applications are always free. Charging for free government services is a scam.
• Monthly fees
  They charge recurring fees to "manage" your loans or "monitor" your forgiveness status. No legitimate service works this way.
• Requests for your FSA ID credentials
  They ask for your StudentAid.gov username and password. Legitimate servicers never need this. Your FSA ID is like a financial signature—never share it.
• Promises of instant or guaranteed forgiveness
  "We can get your loans forgiven immediately." No one can do this. Forgiveness requires meeting specific program requirements over time.
• Pressure tactics and urgency
  "Act now before the program ends." "Limited spots available." "Deadline tomorrow." These are manipulation tactics to prevent you from thinking clearly.
• Unsolicited contact
  They call, text, or email you out of the blue with offers. Your real loan servicer has your account info—they don't need to cold-call you with deals.
• Vague company identity
  They use official-sounding names like "Federal Student Aid Center" or "Department of Education Services" but aren't actual government entities.
• Requests to make payments to them
  They ask you to send loan payments to their company instead of your servicer. This is theft.

How to Verify Legitimate Contacts

Not sure if a call or letter is real? Here's how to check:

Verification Steps

1. Hang up and call back. If someone claims to be from your servicer, hang up and call the number on your servicer's official website (not the number they gave you).
2. Check your servicer's website directly. Type the URL yourself—don't click links in emails or texts.
3. Log in to StudentAid.gov. Any legitimate program changes or messages will appear in your official account.
4. Never act under pressure. Real deadlines are published on government websites, not sprung on you in phone calls.

Common Scam Tactics in 2025

The "SAVE Plan Emergency" Scam

Scammers use real news about the SAVE plan being enjoined to create urgency. They offer to "rescue" you from the chaos—usually by consolidating into private loans (which eliminates all federal forgiveness eligibility forever).

The "Biden Forgiveness" Scam

Despite broad forgiveness being blocked by courts, scammers still claim they can get you "Biden forgiveness" for a fee. There is no broad forgiveness program currently operating.

The "Payment Reduction" Scam

They promise to dramatically reduce your payments for a fee. In reality, you can apply for income-driven repayment yourself at studentaid.gov/idr for free.

The "Legal Settlement" Scam

They claim to represent a class action or legal settlement that entitles you to forgiveness. Real class actions don't require you to pay fees to participate.

Where to Report Scams

If you've been contacted by a scammer—or worse, if you've already paid one—report it immediately:

What If You Already Paid a Scammer?

1. Stop all contact and payments immediately. Don't send any more money, even if they threaten you.
2. Contact your bank or credit card company. You may be able to dispute charges or stop payments.
3. Change your FSA ID password. If you shared your credentials, change them immediately at StudentAid.gov.
4. File reports with all agencies listed above. The more reports, the more likely action will be taken.
5. Check your credit reports. Scammers may have stolen your identity. Get free reports at AnnualCreditReport.com.
6. Consider a fraud alert or credit freeze. This prevents scammers from opening new accounts in your name.