Student Loan Forgiveness Scams In 2022

Getting student loans forgiveness is one thing most students are desperate and eager to get. Due to this desperation, many have fallen prey to Student Loan Forgiveness Scams.

This is very bad!

Student loan forgiveness is a common area for scammers and unethical companies who aim to exploit the fears of new grads. Most students out of the anxiety created by Student loan debt have ignorantly filled the pocket of scammers who pretend to assist them with their outstanding student loans.

These acts has put many students in lifetime debt.

If you are among this category of students, or you are trying to get a student loan forgiveness, this article will enable you to know if you are about to be scammed or not.

After reading this post, you should be able to know whether a Student loan forgiveness is a scam or legit to avoid you been played.

You can navigate through the table of content below to get an overview of all this post entails

What Is Student Loan Forgiveness Scam?

Student loan forgiveness scams are fraudulent acts conducted by some illegal companies where they promise you a student loan cancellation. They also promise easy loan relief once you can pay a certain amount of money to them.

The internet space has made it even easier for them to perpetuate their evil schemes. It has also given them sort of a “blanket”, therefore, you must be very wary.

If you are not careful, you can easily be victim to these dubious activities.

Anyways, you don’t have to be scared at all or think that there is no legitimate student loan forgiveness scheme, because there are genuine student loan forgiveness programs that can relieve your debts. And they include federal government loan forgiveness, Obama student loan forgiveness, and the rest.

All you need to do is to know when those student loan forgiveness scams call starts coming in and avoid them.

How can I figure out the scam calls? you may ask

That is not a problem at all because the answer you need is right below.

See Also What Happens If You Don’t Pay Student Loans? 10 Shocking Options

How To Know Student Loan Forgiveness Scams

There are so many ways you can spot out scam student loan forgiveness program.

As a student, whether you are a college, undergraduate, or graduate student, it is expedient you know how to identify a student loan forgiveness that is a scam or legit. This will enable you not to fall victim to fraudulent activities.

To start with, when you notice that a company is using Aggressive sales tactics, don’t just walk away, Run!

No Legit student loan forgiveness agencies use aggressive sales tactics in their process.

Also, when you receive spammy emails, constant calls from unknown phone numbers, sales calls, threats, or demands, just know that you are in the wrong place.

Secondly, when a company demands Upfront fees or asks for your credit card numbers, just know that its a scam. On no account will a company or government agencies ask you for a fee or personal information before giving you a student loan forgiveness.

Moreso, any government agency or company that promises you immediate student loan forgiveness is likely to be a red flag or a scam.

This is because it’s not possible to get immediate loan forgiveness or cancellation. For instance, government forgiveness programs require several years of qualifying loan payments before your loans are forgiven.


Some student loan forgiveness scam companies will give you a time limit for you to do what you are expected to do if not the process will be terminated. if you are not careful, you will be scammed because you don’t need a deadline.

Furthermore, be very sensitive to know when a company is trying to get your personal account detail like your password and pin. Legitimate student Loan Forgiveness companies cant demand your pin, so when you are asked for such things just know it’s a scam.

I tell you, fraudsters use different tactics to get money and personal information from people. So, it’s very important you are alert and sensitive when trying to get your student loan forgiveness.

If you need help or information about your student loans, you should contact your student loan servicer first to see if you can change your repayment plan or qualify for any help.

List Of Student Loan Forgiveness Scams

There is more to student Loan scams than just promising student loan forgiveness. These dubious companies devise different ways on how to get money from you.

Basically, there are so many Student Loan Forgiveness Scams envoke today, below is a list of five common once.

#1. Loan Consolidation Scam

Loan Consolidation scam is the most common student loan scam existing today. This is when a company tells you to consolidate your student loans in order to make your loan payments and charges very easy to pay.

Actually, Student loan consolidation is a service only provided by the federal government and some private lenders, like Discover and Wells Fargo. This allows you to combine your student loans to create one loan with one payment.

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So, any company that tells you to pay a fee to consolidate your loans, it’s a scam. Although there may be a fee from private lenders after consolidation, you should not pay to apply for it.

Don’t fall into the trap of paying for something you could do for yourself for free.

#2. Lawsuit Student Loan Scam

This is another common scam. Here a law firm will advise you to pay some of your student loan payments to them while they will help you settle other debt. That means you can pay your student loan debt for less than you actually owe.

Most times, they will ask you to pay them your student loan payment while they negotiate a settlement with your lender. They obviously don’t negotiate with your lender and this can cause you to go into default.

When you go into default on your loans, the law firm will then try to negotiate a settlement claiming that you can’t pay your bills. This will hurt your credit score significantly and there is still no guarantee that the firm will be able to settle your loans.

Check out: International Student Loans in the UK: How to Get and Payback in 2021

#3. Student Loan Debt Elimination Scam

If you come across any company offering quick debt elimination you should run toward the other direction because you are about to be scammed. Debt elimination is a myth.

They will want to make you believe that because the school either college or university that you went to is no longer in existence, your debt can be completely wiped out at a cost. Although it can be possible, you are not supposed to make any payment before that debt can be eliminated.

For instance, the federal government may permit student loan debt discharge for special circumstances, such as disability, death and if your school closed.

According to the Federal Student Aid website, “If you’re no longer required to make payments on your loans due to other circumstances, such as a total and permanent disability or the closure of the school where you received your loans, this is generally called discharge.”

#4. Advance Fees Scam

Don’t be fooled!

When it comes to a student loan, the federal government offers multiple student loan services for free.

This Advance-fee scam has to do with when scammers make claims about being able to negotiate lower interest rates or better loan terms if you’re willing to pay a small fee upfront.

The issue in this scam isn’t that there is a fee; it’s that the scammer is charging you a fee upfront before providing any service.

That’s not how student loan repayment is supposed to work. Federal loans have origination fees, but it’s usually added the total amount of the loan, not a separate charge in advance. Additionally, you are also subject to a fee for defaulting on your loan.

Private loans usually have an origination fee or a disbursement fee, but again, this fee is added to the total of the loan itself. In general, be careful any time anyone wants to charge you upfront for a service related to your student loan debt.

#5. Obama Student Loan Forgiveness Scam

Although Obama Student Loan Forgiveness exists, there is also Obama Student Loan Forgiveness scam which if you are not careful, you can be a victim.

Basically, Obama Student Loan Forgiveness program which is also known as Pay As You Earn (PAYE) program is a new program created by President Obama during his tenure to help students who are finding it difficult to clear their debt.

The core aim of this program is simply to keep student loan debt manageable and then forgive the remaining balance if certain requirements are met.

The major challenge about this program is that the number of students enrolling in this program is too small. This is because students have little or no knowledge about how it comes.

This has given scammers the opportunity to defraud people using this program. They will promise to make your student loan payments reasonable, all to no avail.

Therefore, it is important you know how Obama Student Loan Forgiveness works to avoid falling into scammers net.

Check out: How can Obama Loan Forgiveness & Discharge help me as a student in 2021?

How Obama Student Loan Forgiveness Works

The Pay As You Earn Program as its also called is one of the best ways you can get student loan forgiveness. It is actually a repayment program, not a student loan forgiveness program.

To enroll for this program all you need to do is following the guideline below;

  • Call your loan provider and ask to be enrolled in the PAYE Program (Make sure you say Pay As You Earn and NOT Obama Student Loan Forgiveness).
  • Provide your tax returns for the previous year, and pay stubs from this year.
  • The Department of Education will calculate your “Discretionary Income” based on the application you submitted. Note, The actual amount of your “discretionary income” is determined by a formula based on your family size and income tax returns.  

Note, It will typically take 60-90 days before your application can be processed. Under Obama’s PAYE plan, your student loan payment will not exceed 10% of your discretionary income – which is a huge benefit for borrowers.

#6. Federal Student Loan Forgiveness Scams

Though the Federal Government has various student loan forgiveness programs they offer for free, scammers also try to defraud people with these programs.

Some companies may offer to help you consolidate your federal loans with the federal government if only you can pay a certain amount of money. Its not real!

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Although the federal government can help you consolidate your loan, you must not have to pay anything because its free.

However, when you consolidate your federal student loans, you get a Direct Consolidation Loan, which has a fixed interest rate for the life of the loan.

Some of the other free programs provided by the federal Government you should be aware of counts the following:

income-driven repayment plans

Here you are expected to make your monthly payment based on how much money you make in a month.

Deferment and Forbearance 

With deferment and forbearance, you can postpone your payments if you notice that with your present situation you cannot make payment at the right time you are supposed to.

The only disadvantage about this is that the interest might increase a bit.

Loan Forgiveness or Loan Discharge 

With loan forgiveness or discharge, you don’t have to repay some or all of your loans. To be eligible for this program, either you are not handicapped, you work for a government, or the school you graduated from is no longer existing.

Having seen the list of student loan forgiveness scams and how to spot them out, let’s take a look at some things you can do if you really want to avoid these scams.

How To Avoid Student Loan Forgiveness Scams

Prevention they say is better than a cure. It will cost you more to revert any defraud activity that you fell victim to then when you are able to avoid it. Some here are some steps to take if you don’t want to be scammed.

  • When any company calls you for an upfront fee, first contact your loan servicer and confirm. If you need a third-party service to help you fill out forms to obtain or apply for an exemption, pay the company only when it has helped you with your loans.
  • Try to look for loan repayment assistance programs offered by your state, other organizations, and companies. Don’t pay the company to pay off your student loans faster because that’s not possible.
  • Ensure you do research before responding to advertisements.
  • Don’t issue your student loan account information to any company. It is best to call your service representative if you need to talk about your account.
  • If you are concerned about ending the program or losing benefits, you should contact the student loan office or the department of education.
  • You should avoid signing authorization documents for debt collection companies. Contact the Student Loan Office if you have a problem with your account.

Hope its well understood?

With these tips or guidelines am sure that you won’t by chance fell victim or prey to any student debt forgiveness scam.

But peradventure you have been scammed already, don’t give up yet, there is still something you can do about it that can at least make you not to lose more than you have lost already.

What To Do If You Have Been Scammed

Whether you have been defrauded already or you about to be, quickly do the following right now

Call the credit bureaus

This is the first thing you must do. Contact the three major credit bureaus – Equifax, Experian, and TransUnion.

This will help enable them to freeze your credit account immediately incase the scammers wants to tamper your account with the personal information you gave them.

Call your loan servicing company

Call your loan servicer to get your student loan repayment back on the right track. They can achieve this by setting up a repayment plan you can afford.

In same vein, get to your lender as soon as possible and let them know what happened.

Change your Login Details

This is one thing you must not fail to do once you have been scammed. Ensure you tell your loan servicing company to change your account passwords and profile information, and discharge any power of attorney paperwork filed on your behalf prior to the incident.

You should also try discussing with them directly on the best and suitable steps to be taken in moving forward with your loan repayment.

Bank-issued stop payment for the fees 

If an advance fee has been demanded, you can get your money back or avoid losing more by informing your bank or credit card issuer to put a hold on the payment.

You should report such transactions as fraudulent, this may prevent you from having to pay for it.

This is where using a credit card favors when compared to a debit card.

Keep your FSA ID Save

If your FSA ID has been shared with the company, quickly update your password. You should also get in touch with the Office of the Inspector General. 

Other options to be considered here involves reporting the company to the Consumer Financial Protection Bureau through their online complaint site at

You can also get in touch with the Federal Trade Commission (FTC) to file a complaint if you believe you are a victim of a student loan aid scam.

Although this might not help you recover your lost funds, it might help to shut down a real scam company.

Report to your state attorney general

Some state attorney generals have incited an aggressive approach on student loan repayment assistance scams.

You should contact your state attorney general to file a complaint with the specific information.

SEE: AES Student Loans Reviews 2021: Is AES Student Loans Legit or Scam?

Which Student Loan Forgiveness Programs Are Legitimate And Are Not Scams?

Like I said earlier, that there are student loan Forgiveness scams doesn’t mean that there are no legit Loan forgiveness programs for students.

Student loan forgiveness programs do exist just that its process is cumbersome and it’s only applicable to federal loans alone, not a private student loan. So whenever someone promises to erase your debt with a private lender, it’s most probably a student loan forgiveness scam.

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Seeking forgiveness for your federal loans might involve opting for an income-driven repayment (IDR) plan. For these plans, you just have to pay a small percentage from your income toward your student loans.

You can also go for Public Service Loan Forgiveness (PSLF) Depending on your profession or your repayment plan.

There are student loan forgiveness programs that are legitimate and are not scams. Some of them count the following;

Income-Driven Repayment Forgiveness

Income-driven repayment is one of the most common ways you can qualify for student loan forgiveness.

If you enroll in this program, you can be allowed to pay only 10% to 15% of your monthly discretionary income, which can lower your student loan bill each month.

Also, your loan balance will be forgiven after 20 to 25 years, depending on the income-driven repayment plan.

Have it in mind that you may pay more over the loan term than you would with a standard repayment plan of 10 years so, you should evaluate whether enrolling in these plans makes sense for your finances.

Public Service Loan Forgiveness (PSLF)

PSLF is a legitimate student loan forgiveness program available to federal student loan borrowers who work in eligible public service fields.

As a borrower, you can have your student loans forgiven after making 120 qualifying loan payments.

You must enroll in an income-driven repayment plan before you can be eligible for this program.

Also, you must fill out an application and if you qualify, your loans will be transferred over to FedLoan Servicing, which is where you will make your loan payments.

Federal Perkins loan

Federal Perkins loan is another legit student loan forgiveness program. With this program, you can receive up to 100 percent of your loans for working as teachers.

To qualify, you must teach in a low-income school or work in special education, teach math, science, or any other subject you need.

Moreso, you can get a loan for five years. After each year, you can give up a percentage of your loans (these amounts can also cover interest).

Teacher Loan Forgiveness

Teacher Loan Forgiveness allows teachers of math, science, or special education to have up to $17,500 of their student loans forgiven and up to $5,000 for other subjects.

Teachers will qualify after five years of working full-time at a low-income school or an educational service agency.

You must fill out an application and send it to your student loan servicer. The chief administrative officer at the school(s) you’ve worked at will have to certify your employment and that you meet the requirements for loan forgiveness.

For a more in-depth guide of your student loan forgiveness options, read the other choices on the same guide for teacher loan forgiveness.

Also, it’s important to note that FedLoan Servicing, Nelnet, and Navient are legitimate companies. They are student loan servicers that manage your payments and are your main point of contact in regards to your loans.

Be sure to become familiar with your student loan servicer to find the best repayment plan for you and stay on top of your payments.

How Do I Apply For Student Loan Forgiveness

To receive most loans, you must apply online at You can also get a paper application from your loan lender.

Then, you will provide documents such as proof of income and a tax return, as needed.

Other the other hand, to apply for a public service loan forgiveness, you must complete and submit an employment certification form each year or when you change jobs.

Then, the FedLoan Service will review your information and inform you if you are qualified. They can request more information, such as payroll cards, other documents.

See How to qualify for student loans in 2021: 10 Key Steps


What is Student loan forgiveness scams?

Student loan forgiveness scams are fraudulent acts by some illegal companies whereby they promise you a student loan cancellation or easy loan relief once you can pay a certain amount of money to them.

How can I avoid Student loan forgiveness scams?

1. To avoid Student loan forgiveness scams first contact your loan servicer when you receive a call demanding that you make an upfront fee.
2. Try to look for loan repayment assistance programs offered by your state, other organizations, and companies. Don’t pay the company to pay off your student loans faster because that’s not possible.
3. Ensure you do research before responding to advertisements.
4. Don’t issue your student loan account information to any company.
5. It is best to call your service representative if you need to talk about your account……

Which student loan forgiveness programs are legitimate?

Some of the student loan forgiveness programs that are legitimate include the following;
1. Income-Driven Repayment Forgiveness
2. Teacher Loan Forgiveness
3. Public Service Loan Forgiveness (PSLF)

What should I do if am been scammed?

If you have been scammed, the first thing to do is to contact Call the credit bureaus.
Call your loan servicing company
Change your password and login details
Bank-issued stop payment for the fees 
Keep your FSA ID Save…….



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