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Federal Student Loan Forgiveness Scams

Updated: May 16

We all know that student loan debt in America is a huge problem. It's so big, in fact, that the average undergraduate owes $37,172 by graduation day.



What most people don't know is how to escape the vicious cycle of debt and crippling interest rates. The good news? There are options. But before you get too excited, be sure to do your research first or else you might end up as a victim of one of many federal student loan forgiveness scams.


We will give you some tips on how keep yourself out of this predicament.


What are some warning signs of a student loan debt relief scam?


  • The company has “federal,” “national” or other official-sounding words in its name or claims it has a relationship with the government.

  • Many companies try to sound more official or appear to be associated with the government by having these words in their title when, in fact, the companies are separate entities. Scam companies may also falsely suggest that they are affiliated with the federal government based on their logos and even their website addresses. If a company claims that it has a special relationship with the government or the Department of Education, it is likely a scam.

  • You are asked to provide your Federal Student Aid (FSA) PIN.

  • Never share your four-digit PIN with others. If you provide this information to a student debt relief company, the company may make changes in your account that you do not want.

  • You are promised immediate relief or forgiveness of your loans.

  • Don’t be lured by unrealistic-sounding services like complete loan forgiveness or immediate loan reduction. Beware of phrases like “Get Your Student Loans Forgiven Now!” or “Guaranteed Results!”. No student loan debt company will "forgive" your student loans - no matter how much you pay them.


What a legitimate third-party assistance company can offer


A legitimate assistance company works in partnership with the loan holder with their best interest in mind, the same way H&R Block does during the tax season. You, as an individual, could of course ALWAYS file your own taxes with the IRS. But with H&R Block you submit your tax return or income information to their tax code experts, and they advise the BEST WAY for you to file your paperwork to the IRS- based on your income, family size and employment circumstances to submit to your paperwork to your servicer bank and DOE to achieve the best outcome possible.



Similarly, student loan experts stay up to date with the constantly changing federal regulations, guidelines, and programs; then offer similar assistance for this specific industry.


For instance, when completing your IDR application electronically you are only given the option to submit both you and your spouse’s tax return as proof of income, thus including your spouse’s income in determining your monthly payment for your student loans. When in fact, you may not have reasonable access to their income and it shouldn't be included when calculating your payment. If this is the case, you will need to submit a manual re-certification and check the "Married but can't reasonably access my spouse's income information" under section 4A on your IDR application. This may result in a lower monthly payment calculation.

In this example, note that the assistance company is not offering any programs separate from the DOE or its servicer banks, just informing you of potential factors that can help you legally maximize your enrollment in those existing programs and give you the best chance to successfully achieve your financial goals.


If you are interested in finding out more about assistance start HERE

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