Student loan forgiveness sounds like a dream come true—especially when you’re drowning in debt and desperate for relief. Unfortunately, it’s also a magnet for scammers.
Every year, thousands of borrowers are tricked into paying for services they could get for free—or worse, into giving up their Social Security numbers, credit card info, and financial control to fraudsters.
In this article, you’ll learn:
- The red flags of student loan forgiveness scams
- Real examples of how these scams work
- Why lawyers are your best line of defense
- What legal steps you can take if you’ve been scammed
- How to safely pursue forgiveness programs in 2025
Let’s dive in.
What Is a Student Loan Forgiveness Scam?
A student loan forgiveness scam is any scheme where a company or individual:
- Promises loan forgiveness or cancellation
- Charges illegal or unnecessary fees
- Asks for your FSA ID or personal information
- Disguises itself as a government program
These scams prey on fear, urgency, and a lack of knowledge about how real forgiveness programs work—especially with federal student loans.
Common Types of Student Loan Forgiveness Scams
Here are the most prevalent scams targeting borrowers today:
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1. “Obama/Biden Student Loan Forgiveness Program”
There’s no such official program. Scammers use political names to create a false sense of legitimacy.
- These offers are often used in robocalls and emails.
- Fact: Federal forgiveness options do exist (like PSLF and IDR), but they’re not named after presidents.
2. Advance Fee Scams
Companies charge upfront fees (often $500–$2,000) to “enroll” you in forgiveness or consolidation programs.
- Illegal under FTC rules.
- Fact: The Department of Education does not charge for enrollment in any loan forgiveness or consolidation program.
3. Fake Loan Consolidation Services
These scammers promise to consolidate your loans but:
- Charge you money
- Don’t actually submit your application
- May switch your loan servicer to steal future payments
4. IDR Enrollment Fraud
They charge for helping you enroll in Income-Driven Repayment (IDR)—which is free to do at StudentAid.gov.
- You may end up with false info submitted on your behalf, causing issues later.
5. Phishing and FSA ID Theft
Scammers ask for your:
- FSA ID login
- Social Security number
- Bank account info
Once they have it, they can:
- Change your loan servicer settings
- Divert your payments
- Commit identity theft
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Real-World Example
In 2023, the FTC and Department of Education shut down a company called “Student Advocates,” which:
- Charged over $71 million in illegal fees
- Misled borrowers about forgiveness eligibility
- Submitted false applications
Borrowers who paid were worse off—and many were locked out of their loan accounts.
How to Spot a Student Loan Forgiveness Scam
Use this checklist to protect yourself:
| ❌ Red Flags | ✅ Reality |
|---|---|
| “Act now before it’s too late” | Federal programs don’t have urgency or deadlines like this |
| “We’re affiliated with the Department of Education” | Only your servicer or StudentAid.gov are official |
| “You qualify for complete loan cancellation” | Forgiveness depends on your job, plan, and payments |
| They want your FSA ID | Never share your login with anyone |
| Upfront fees or monthly charges | Government services are free |
How a Student Loan Lawyer Can Protect You
If you’re unsure whether an offer is legitimate—or you’ve already been scammed—a student loan lawyer can step in to:
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1. Review Your Forgiveness Eligibility
Before you commit to anything, a lawyer can:
- Review your loans
- Verify whether you qualify for PSLF, IDR Forgiveness, TPD Discharge, or Borrower Defense
- Help you enroll properly and safely
Lawyers don’t “sell” you forgiveness—they fight to get what you legally deserve.
2. Help Recover Money from a Scam
If you were scammed:
- A lawyer can file a formal dispute or demand letter
- Sue the company for unfair or deceptive practices
- Help recover funds or stop credit damage
3. Report the Fraud to Authorities
Your lawyer can help you report the scam to:
- The FTC
- Consumer Financial Protection Bureau (CFPB)
- Your state attorney general
- The U.S. Department of Education
This adds pressure and increases your chance of recovery.
4. Correct Loan Errors Caused by Scammers
If a scammer:
- Changed your repayment plan
- Submitted false info
- Enrolled you in a harmful consolidation
…a lawyer can fix it and help restore your original loan terms or servicer access.
5. Stop Ongoing Harassment
Some scammers keep charging or calling, even after you cancel.
Your lawyer can:
- Stop illegal contact under the Fair Debt Collection Practices Act (FDCPA)
- File a restraining order or lawsuit for damages
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What Forgiveness Programs Are Actually Legit?
Here are real programs available through the Department of Education:
1. Public Service Loan Forgiveness (PSLF)
Forgives your federal loans after:
- 120 qualifying payments
- Working full-time for a government or nonprofit
No fees. Apply at StudentAid.gov/PSLF
2. Income-Driven Repayment (IDR) Forgiveness
Forgives remaining federal loan balance after:
- 20–25 years on an IDR plan
New in 2024: IDR Account Adjustment is helping borrowers get retroactive credit toward forgiveness.
Apply directly via your loan servicer.
3. Total and Permanent Disability (TPD) Discharge
Cancels loans if:
- You’re unable to work due to a certified disability
Apply at disabilitydischarge.com
4. Borrower Defense to Repayment
For students defrauded by their schools.
Apply at StudentAid.gov/borrower-defense
5. Closed School Discharge
Forgives loans if your school shut down while you were enrolled.
What Not to Do
- Don’t give out your FSA ID
- Don’t pay upfront fees
- Don’t trust unsolicited texts, calls, or DMs
- Don’t believe forgiveness is “guaranteed” or “exclusive”
Always double-check offers with StudentAid.gov or a licensed lawyer.
When to Contact a Student Loan Lawyer
Call a lawyer if:
- You’ve paid a questionable company
- You’re confused about your forgiveness eligibility
- Your servicer is mismanaging your case
- You’ve been a victim of identity theft or unauthorized changes
- You want help applying for legitimate discharge programs
How Much Does a Student Loan Lawyer Cost?
| Service | Typical Fee |
|---|---|
| Scam review consultation | $100–$300 |
| Legal complaint or refund demand | $500–$2,000 |
| Forgiveness application review | $500–$1,500 |
| Lawsuit against scam company | $2,000–$5,000+ |
Many lawyers offer flat fees or payment plans—especially for consumer protection cases.
Final Tips to Stay Safe
- Use StudentAid.gov for anything federal loan-related
- Sign up for your loan servicer’s account portal
- Report scams to the FTC Complaint Assistant
- Monitor your credit and bank statements
- Work with a licensed attorney, not a call center
Final Thoughts
Student loan forgiveness is real—but so are the scams. The difference? Knowledge, caution, and knowing when to bring in a lawyer.
If something feels off, don’t sign. If you’ve already been misled, don’t panic. A student loan lawyer can help you protect your finances, recover from fraud, and find the real relief you deserve.