March 26, 2025

How to Protect Yourself from Student Loan Scams

Kristin Hudson
Woman discovering she was a victim of a student loan scam

Student loans have been in the forefront of many people’s minds since the student loan forbearance efforts during the pandemic. This relief measure provided borrowers with a temporary pause on their federal student loan payments, allowing them to focus on other financial obligations during uncertain times. However, when this forbearance period ended in fall 2023, scammers seized and continue to seize on the opportunity to exploit the confusion surrounding student loan repayments.

Unfortunately, fraudsters are finding ways to deceive borrowers through phone scams, phishing emails, and text message scams. These scams aim to steal personal information and money by creating confusion and preying on the fear of falling behind on payments.

To help protect yourself, it’s crucial to be informed and vigilant. Below are four essential tips to help you avoid falling victim to student loan scams.

1. Research the Lender Before You Engage

One of the most effective ways to avoid student loan scams is to thoroughly research any lender, servicer, or company that claims to offer student loan relief. Scammers often pose as legitimate entities, using official-sounding names or even impersonating government agencies.

Before engaging with any company, visit the Better Business Bureau (BBB) website to read business profiles and customer reviews. The BBB allows you to verify the legitimacy of businesses and see if there are complaints filed against them. If you suspect a scam, report it at BBB.org/ScamTracker.

A key warning sign of a scam is a company asking for upfront payments. In the United States, it is illegal for companies to charge borrowers before providing student loan assistance. If a company demands payment before offering help, it’s a red flag, and you should walk away immediately.

2. Never Pay an Upfront Fee for Student Loan Help

Scammers often entice borrowers with promises of quick loan forgiveness or drastic reductions in their debt. However, if you are asked to pay an upfront fee to lower or eliminate your student loan balance, it’s likely a scam.

Consumers should be aware that they can apply for loan deferment, forbearance, income-driven repayment plans, and even forgiveness programs — completely free of charge. These services do not require any third-party intervention.

Scammers use high-pressure tactics, urging borrowers to act immediately before a supposed deadline. In reality, legitimate student loan relief programs do not operate with such urgency. If you feel pressured to make a quick decision or provide payment details, take a step back and verify the information through official sources, such as StudentAid.gov.

3. Never Share Your Personal Information with Unverified Sources

One of the most dangerous aspects of student loan scams is identity theft. Scammers often pose as loan servicers to collect sensitive information, such as your Federal Student Aid (FSA) ID, Social Security number, or banking details. Once they obtain this information, they can gain access to your loan account, change your contact details, and even redirect your payments to their own accounts.

To help avoid falling victim to identity theft:

  • Never share your FSA ID or login credentials with anyone.
  • If you receive a call, email, or text message claiming to be from your loan servicer, do not provide personal information. Instead, contact your servicer directly using the official contact details found on their website.
  • Be cautious of emails with generic greetings, spelling errors, or suspicious links. Scammers often use phishing emails to trick borrowers into revealing personal details.

Legitimate loan servicers will never demand sensitive information via email or text. When in doubt, verify requests by logging into your student loan account through StudentAid.gov or by calling your loan servicer directly.

4. Utilize Identity Theft Protection Services

Even the most cautious individuals can sometimes fall victim to fraud. To further protect your financial and personal information, consider enrolling in an identity theft protection service. These services provide real-time alerts when possible suspicious activity occurs, allowing you to take action before a minor issue escalates into a costly problem.

Identity theft protection services offer:

While identity theft protection services do not prevent scams, they provide an additional layer of security and can help you respond swiftly if your information is compromised.

Student Loan Scam Red Flags to Watch Out For

Scammers use a variety of deceptive tactics to target borrowers, including using AI to customize scams and replicate official-looking messages. They also create a false sense of urgency, telling borrowers they must sign up for a program immediately to qualify for relief. Legitimate programs do not require immediate action. If you feel rushed or pressured, it’s likely a scam.

Some fraudulent companies promise to lower your monthly payments or consolidate your loans for a fee. However, borrowers can enroll in government income-driven repayment plans or consolidation options for free.

Any unsolicited request for your Social Security number, FSA ID, or bank account details is a red flag. Scammers often claim they need this information to “verify” your eligibility for a program. Legitimate servicers will never ask for sensitive information over the phone or via email or text.

Bottom Line

With student loan payments, scammers will continue to find new ways to deceive borrowers. Staying informed, conducting thorough research, and being cautious with personal information are the best ways to protect yourself from falling victim to fraud.

If you suspect that you’ve been targeted by a student loan scam, report it immediately to the FederalTrade Commission or the Better Business Bureau. Additionally, actively monitor your credit report for signs of possible fraud.

By taking these precautions, you can help protect your financial well-being and avoid becoming another victim of student loan fraud.