Avoid Student Loan Scams: Guide for Students and Graduates

Worried about student loan scams? Learn how to spot and avoid the most common student loan frauds in 2025. Protect your money and personal information with these expert tips.

Why Student Loan Scams Are on the Rise

Student loan scams have increased significantly in recent years, especially with changes in repayment programs, debt relief promises, and federal policy confusion. Scammers often target:

  • Recent graduates with loan debt
  • Students applying for new loans
  • Borrowers waiting for loan forgiveness

They use fake promises, urgent threats, or government impersonation to trick people into paying unnecessary fees—or worse, handing over personal information.

Common Student Loan Scams to Watch For

Recognizing red flags is the first step toward protecting yourself. Here are the most common scams in 2025:

1. Fake Student Loan Forgiveness Programs

Scammers claim they can erase your student loans quickly—for a fee. They may reference legitimate-sounding programs like “Biden Loan Forgiveness” or “CARES Act Relief,” but they ask you to pay upfront or provide your login credentials.

Red Flag: No legitimate loan forgiveness program charges an upfront fee or guarantees cancellation.

2. “Advance Fee” Debt Relief

You’re told that you must pay a fee to have your loans reduced, paused, or consolidated. This is illegal under federal law.

Tip: Federal student loan services are free. Never pay upfront for help with government loans.

3. Impersonating Federal Agencies

Some scammers pretend to be from the Department of Education, Navient, or MOHELA. They may use fake logos, spoofed phone numbers, and official-sounding language.

Check: Only use official .gov websites or verified contact numbers from your loan servicer.

4. Phishing Emails and Fake Login Pages

You receive an email that looks like it’s from your servicer, asking you to “verify your account” or “log in to avoid default.” The links direct you to a fake site where your login details are stolen.

Solution: Always log in directly through the official site—not from email links.

5. “Act Now or Else” Threats

Scammers create urgency, saying your loans will be canceled, paused, or sent to collections unless you take immediate action. They push you to make quick decisions without researching.

Reality: Legitimate agencies will never threaten you into immediate payment or demand sensitive data over the phone.

How to Avoid Student Loan Scams: 7 Key Tips

  1. Never Pay for Federal Loan Help: Services like deferment, forbearance, income-driven repayment, and consolidation are free through your servicer.
  2. Verify Loan Forgiveness Offers: Check official programs through StudentAid.gov. When in doubt, call your loan servicer directly.
  3. Protect Your FSA ID and Password: Your FSA ID is your digital signature. Never share it—not even with third-party “helpers.”
  4. Avoid Sharing Personal Information: Be cautious when asked for your SSN, banking info, or student loan logins—especially on calls you didn’t initiate.
  5. Read the Fine Print: Scammers may bury misleading clauses in contracts. If a company demands monthly fees or long-term commitments, read carefully.
  6. Check for Registration and Licensing: If you’re dealing with a third-party company, verify their legitimacy with the Better Business Bureau or your state attorney general.
  7. Report Suspicious Activity Immediately: Contact the Federal Trade Commission (FTC) and your loan servicer. You can also report to the Department of Education’s Office of Inspector General.

What To Do If You’ve Been Scammed

If you believe you’ve already been targeted:

  • Contact your loan servicer immediately to protect your account.
  • Change your FSA ID and passwords.
  • Report the scam to the FTC at reportfraud.ftc.gov.
  • Monitor your credit report for unauthorized activity.

You may also want to file a fraud alert with major credit bureaus and consider a credit freeze if sensitive information was stolen.

Legitimate Resources for Student Loan Help

Only trust these official resources for student loan guidance:

  • Federal Student Aid (studentaid.gov)
  • Your official loan servicer (e.g., MOHELA, Nelnet, Aidvantage)
  • Your school’s financial aid office
  • National Foundation for Credit Counseling (NFCC)

Final Thoughts: Stay Alert, Stay Protected

Student loan scammers are clever, persistent, and constantly evolving their tactics. Staying informed is your best defense. Never rush into any loan-related decision—especially if someone is asking for money or personal details.

By learning how these scams work and taking simple precautions, you can protect your identity, your finances, and your future.

Related Articles

  • How to Consolidate Federal Student Loans Safely
  • Income-Driven Repayment Plans Explained
  • Biden’s Student Loan Forgiveness Updates
  • What To Do If You Miss a Student Loan Payment
  • Should You Refinance Student Loans in 2025?
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