Con Watch: Student Loan Forgiveness Scams

Whenever money is involved, you can be sure that the scammers won’t be far behind. Here’s how to protect yourself.


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Steve Weisman is a lawyer, college professor, author, and one of the country’s leading experts in cybersecurity, identity theft, and scams. See Steve’s other Con Watch articles.

Forty-eight million Americans owe close to $1.75 trillion in student loans. To put this into perspective, that figure is almost $412 billion more than all of the automobile loans being paid by Americans today.

The burden of student loan payments was significant prior to the pandemic, but the problem has only gotten worse in the last several years. In response, the federal government declared a moratorium on federal student loan repayments starting in March 2020, which has since been extended eight times. The latest extension is now slated to end on December 31.

Red Flags of student loan scams
Infographic of student loan scam red flags (Consumer Finance Protection Bureau)

In an effort to provide additional relief, President Biden announced his plan to forgive as much as $20,000 of federal student loan debt for borrowers who received Pell Grants and up to $10,000 for other federal student loan borrowers.

Approximately eight million borrowers may qualify to get their debt relief automatically because the Department of Education already has all of their relevant information on file. However, others may need to apply for debt relief. It is not expected that the applications will be available for at least a few weeks and perhaps even months. This has led to scammers jumping in and contacting people promising preferential early treatment or assistance in getting the debt relief for an up-front fee. Up-front fees for debt relief are always a scam because those fees are illegal. Scammers try to get victims to hire them quickly by scaring them into thinking that if they do not, they will miss out on an opportunity. Luring people into acting quickly is often the hallmark of a scam. Another red flag is the promise of quick and total loan forgiveness, which is unrealistic.

Scammers are contacting people by phone, text message, or email. It is important to remember that you can never be sure who is actually contacting you. Through a technique called “spoofing” a scammer can manipulate your Caller ID to make the call appear to come from a trusted source. Similarly, text messages and emails can also appear to come from a legitimate source, but actually be coming from a scammer. Don’t trust a message merely because it uses names that sound like it is affiliated with the government.

For trustworthy  information about the student loan forgiveness program, I urge you to sign up for updates from the Department of Education so you will be notified when the forgiveness program becomes operational and instructed as to what steps you need to take.

Finally, one often overlooked federal program that offers limited forgiveness of student loans is the Public Service Loan Forgiveness Limited Waiver program, which is available to former students who have been working either for a government agency, the military, or a non-profit organization. The deadline for applying for benefits under this program is October 31, 2022, so if this applies to you, you certainly will want to look into it.

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  1. This article shows how corrupt the both the educational system and the government are, naturally tied together. Bob, I agree with your comments, and am glad you said it. I have to go to Los Angeles on business periodically, and it’s what you said more each time. Frightening, Don’t even get me started on Zelensky and Ukraine.

  2. Of course scammers are heavily involved, and the biggest lying pile of pooh here is Biden, of course. This student loan forgiveness is all b.s. for the mid-term elections. Once that’s over, he will NOT go through with it. But rest assured, untold, unaccounted for billions will continue to be going into Zelensky’s own pockets and bank accounts Steve!

    The rest is going to the military industrial complex, bio-pharmaceutical complex, Wall Street and more. Anything/anywhere but here! Couldn’t have that. No, turning the entire U.S. into a 3rd world s— pit (like L.A.) is the goal here, and both of these completely destructive crap parties (all one big party of course) are tragically succeeding and then some at our expense.

    I’d love for you to do a special ‘Con Watch’ series for The Saturday Evening Post on that, please.


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