While it’s hard to keep track of all the different scams Americans have to deal with in their everyday lives, the Federal Trade Commission (FTC) has revealed that total losses to fraud nationwide topped more than $10 billion dollars in 2023. Final fraud statistics for 2024 aren’t quite out yet, but FTC data shows some alarming trends in terms of the types of scams that are out there.
For example, online job scams were huge in 2024, as well as employment scams taking place via text. Other popular scams last year involved criminals impersonating government officials, gift card scams, phishing scams, charity scams and the always-popular business and investment scams.
Student loan scams have also run rampant over the last few years, especially since there’s been so much uncertainty when it comes to potential forgiveness plans for federal student loans. While the Biden administration tried to forgive millions of dollars in student loan debt and was successful at forgiving student debt for more than 5 million borrowers, the changing headlines have been downright confusing.
Not only did several of Biden’s student loan forgiveness plans get struck down by the courts, but the same thing may happen to the Saving On a Valuable Education (SAVE) income-driven repayment plan. The fate of this repayment plan still hangs in the balance to this day as borrowers await a decision from the courts on the legality of the plan.
All of this has paved the way for scammers to jump right in with brand new student loan scams that prey on borrowers who are desperate to have their loans forgiven. Here are some of the newest and most common student loan scams to watch out for in 2025.
Student Loan Forgiveness Scams
Student loan forgiveness scams come in several different forms, but they’re all built around the fact it’s so hard to keep up with the headlines these days.
Essentially, scammers reach out to people with student loan debt and promise them help getting their loans forgiven, either through traditional government forgiveness plans or other sources of debt relief.
Of course, the assistance is entirely fake and the criminals are usually trying to get their hands on the borrower’s sensitive personal information in order to steal their identities.
Some student loan forgiveness scams are phishing scams, where they send out a fake email or text with the goal of getting you to voluntarily share information like your full name, address, and Social Security number. Other scams exist to get your federal student loan login information, which can lead to criminals locking you out of your account completely, stealing your identity or both.
Upfront Fees For Student Loan Help
There are companies out there promising loan forgiveness assistance and other types of debt relief in exchange for upfront fees. Unfortunately, they can’t actually deliver on the promise of student loan forgiveness, but they’ll still take your money and pretend to help you until you realize it’s all a ruse.
It’s important to note that there isn’t anything a private company can do that you cannot do yourself for free. And if you do need help, you can always contact your student loan servicer.
The U.S. Department of Education also says that, in some cases, these companies will ask you to send them your student loan payment so they can pay your bills on your behalf. Of course, they will never make your student loan payments since their whole plan is pocketing your money instead.
FAFSA Scams
Scams that have to do with the Free Application for Federal Student Aid (FAFSA) tend to morph over time, although they typically involve a company promising to help families secure financial aid for higher education. In any case, the scammer is trying to:
- Get access to your full name, address, income, banking information and/or SSN so they can steal your identity
- Get paid upfront fees for assisting you
- Falsify documents to get you qualified for more financial aid
- Access your FSA ID and login information for nefarious purposes
Regardless of the goal of the scam, the Department of Education says that you should never pay for help with the FAFSA since you can get it for free through the the financial aid office at your college or schools you’re thinking about attending, the FAFSA form’s online help page, or the Federal Student Aid Information Center.
How To Spot Student Loan Scams
There are some telltale signs that should alert you when something’s not right with a student loan program. Here are some of the red flags to watch out for as you try to avoid becoming a victim of student loan fraud.
- Be skeptical of any company that asks for upfront fees for help. The FTC says it’s illegal for companies to charge upfront fees in exchange for help with debt relief. If a company is asking you to pay for their help, or requesting sensitive information like your bank account information, that’s a sure sign the whole thing is a scam.
- Keep your eye out for aggressive language. Scammers also tend to use aggressive language in order to get you to act quickly. For example, they may say you need to “act now” if you want debt relief, or that the assistance they offer is only available for a limited time.
- Don’t believe promises that seem too good to be true. If a company or individual promises they can erase your federal student loan debt or makes other claims that seem unlikely to be true, it’s definitely a scam.
- Avoid anyone (or any company) who asks for your student loan FSA login information. There is no legitimate reason for a company or individual to ask for or need your FSA ID and login information. If someone is asking for it, you should stop communicating with them.
- Look for typos and grammatical errors. Most scam texts and emails are considerably less polished than messaging you would get from legitimate companies or government agencies. If the communication you receive has typos, it’s probably a scam.
- Be weary of unsolicited communication about your loans. If you receive a text or email about your student loans out of the blue, that’s definitely a red flag. Student loan scammers may also leave you voicemails and claim they’re returning your call, even when you’ve never reached out to them.