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.
More than 42.8 million Americans have student loans with an outstanding balance of more than $1.7 trillion, so it is no surprise that criminals are focusing their attention on these students and former students through scams that falsely promise to provide debt relief.
After a five year pause during the pandemic on penalizing student loan borrowers for not making payments, in January of 2025, the Department of Education instructed loan servicers to start reporting late payers to credit bureaus. As a result, millions of student loan borrowers are seeing their important credit scores drop dramatically.
Then in May of 2025, the Department of Education restarted collections on defaulted student loans after a five-year pause. Government figures indicate that 21 percent of student loan borrowers are late or behind in their payments.
Changes to repayment plans and loan forgiveness programs along with changing federal policies have many student loan borrowers confused and anxious about their loans. Predictably, scammers are stepping in to offer phony debt relief to desperate borrowers.
The One Big Beautiful Bill Act passed in 2025 contained provisions drastically changing student loan programs, with most of the changes taking place starting July 1, 2026.
Some of the biggest changes are to the Saving on a Valuable Education (SAVE) plan, which had been initiated during the Biden presidency. It was designed to make student loan payments more affordable and increase the amount of loan debt ultimately forgiven. Monthly payments were based on a borrower’s income and family size, with undergraduate loan payments reduced to as low as 5 percent of discretionary income. Under the SAVE program, if a borrower’s monthly payment did not cover all of the interest that accrued during the month, the remaining interest was waived, thereby keeping loan balances from growing due to unpaid interest. SAVE also provided for the eventual forgiveness of the student loan after a specified repayment period of between 20 and 25 years, depending upon the type of loan involved.
Under the One Big Beautiful Bill, borrowers have 90 days from July 1, 2026, to switch out of the SAVE plan to a different plan or be automatically transferred to the standard plan; the standard plan has fixed monthly payments that must be paid over a specific number of years and does not generally provide for loan forgiveness.
Alternatively, SAVE plan borrowers can choose Income-Based Repayment (IBR) which, depending on when the loan originated, provides for payments equal to either 15 percent of discretionary income or 10 percent of discretionary income with loan forgiveness after either 20 or 25 years. SAVE borrowers also have the option of transferring to the new Repayment Assistance Plan (RAP), which provides for monthly payments on a sliding scale tied to the borrower’s adjusted gross income. Like the SAVE plan, the RAP plan provides for loan forgiveness.
If all of this sounds confusing, it is. Scammers are taking advantage of this confusion to contact student loan borrowers offering help in transitioning to the new programs and promising forgiveness of loans for a fee. However, enrollment in RAP, IBR, and other federal repayment programs is free, and you should never pay for student loan advice. You can contact your loan servicer for information you can rely on at no fee.
You loan servicer will not try to contact you through social media or unsolicited emails or text messages, so if you do receive such a communication, it is a scam.
The old adage still is true: If it sounds too good to be true, it probably is. Many of these student loan debt relief scammers promise quick loan forgiveness, which is unrealistic. In addition, you should never pay any upfront fees for student loan debt relief assistance. Those fees are illegal and are a sure indication that you are being scammed. Don’t trust someone merely because they use names that sound like they are affiliated with the government. You also should never share your FSA ID with anyone.
For information about student loan repayment plan options, contact the Department of Education.
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