Tips to Avoid Student Loan Forgiveness Scams
Updated June 9, 2022 · 6 Min Read
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There are several legitimate loan forgiveness programs, but hundreds of scams. This guide explains how to avoid student loan forgiveness scams.
Loan forgiveness programs for nurses can make nursing school possible for anybody, regardless of their financial position. Government programs can forgive up to 100% of the remaining balance of a loan.
However, there are scammers who want to use the idea of student loan forgiveness to steal your money, steal your identity, or both. This guide features tips to avoid student loan forgiveness scams.
To learn more about the risks of student loan forgiveness scams, we spoke with Bob Collins, the vice president of financial aid for Western Governors University, and a lifelong advocate for student financial wellbeing. He explains how to avoid student loan forgiveness scams and what to do if you are targeted. Keep reading to learn how to protect yourself.
What are Nursing Student Loan Forgiveness Scams?
Scammers have always targeted students, but technology makes it even easier for a scammer to impersonate a legitimate organization. These impersonations can happen through a text, email, or website and target thousands of individuals at a time.
Scam activity intensified when the government sent COVID-19 stimulus payments, and during the freeze on student loan payments. Scammers saw the money available and the confusion around repayment requirements and leapt into action.
There are millions at stake: In February 2021, the Federal Trade Commission gave almost $2 million to borrowers who had been duped by one company alone. Another 2017 crackdown caught scammers who had defrauded students out of more than $95 million.
Student loan forgiveness is ripe for scamming because there are legitimate programs that offer full loan forgiveness for nurses. Because nurses have heard of these and other programs to help pay for nursing school, many are less skeptical if somebody promises loan forgiveness.
Tips to Avoid Student Loan Forgiveness Scams
You can identify student loan forgiveness scams by the same types of red flags that you already use to identify other scams. The following tips may help you better protect your information and finances.
- 1. Recognize the difference between a good deal and too good to be true
As Collins says, "If it sounds too good to be true, it probably is." Loan forgiveness programs ask for something in return, such as working in an underserved area, joining the military, or teaching nursing. If somebody offers you loan forgiveness for nothing, that is a sure sign of a scam.
- 2. Flashy ads or unsolicited calls, texts, or emails
Another important tip to avoid student loan forgiveness scams: The government will not call, email, or text you out of the blue to offer you loan forgiveness. It also does not advertise alongside clickbait articles, promises of miracle cures, or celebrity gossip.
"The Department of Education and its partners do not send out aggressive advertisements," Collins advises. He adds, "The best way to avoid scams is to not accept unsolicited calls, texts, or emails."
- 3. Asking for payment up front
One common scam is to offer loan forgiveness in exchange for a processing fee and asking for your credit card information. Some scammers are so blatant, they even ask for payment in gift cards.
Even without these warning signs, Collins points out, "Loan servicers are required to help you for free." Because it is not illegal to charge for advice available for free, it is harder for the government to crack down on these operations than to prosecute overt theft.
- 4. Asking for personal information
Some scammers promise to refund into your bank account some previous loan payments you made. All you have to do is give them your account number, your Social Security number, or both.
"If that happens, scammers can impersonate you and buy goods and services on your credit. Identifying and correcting this damage to your name could take years and cost you more money to resolve issues." Identity theft can affect your ability to get legitimate credit, take out a mortgage, or even get a job.
- 5. Numbers, email addresses, or websites that are not .gov or from an official loan servicer
The Department of Education does work with outside loan servicers obligated to help you at no cost. They assist you with billing and repayments. If a company claims to be a loan servicer, check to see that they are on the authorized list.
If you get a call that claims to be from your loan servicer, and you were not expecting a call, say that you will call them back. Look up the number on the servicer's official website and call that number.
- 6. Pressuring you to act immediately
If it sounds like something a sleazy salesperson would say to get you to hand over your money now, it is a scam. While there are deadlines to apply for loan forgiveness, communications from your loan servicer or the government will not say something like, "Act now before the program ends" or "This is available only to the first 20 applicants."
What to Do if You Spot a Scam
If you spot a scam, hang up immediately. You can help fight scammers, Collins urges. "If you believe you're being targeted, report it immediately. You can report suspected fraud to the Federal Trade Commission."
His final tip to avoid student loan forgiveness scams: "Being informed is your best defense, and I'd suggest getting to know your protections."
If you have been scammed, it is even more important to report it. If you think the scammer might try to steal your identity, report it and get advice on how to protect yourself. The resources at the link have advice on how to protect your credit rating and finances.
Nurses are a surprisingly common target for identity theft. They tend to be overworked, answer dozens of calls during a day, and have heard of genuine loan forgiveness programs for nurses.
If a scammer did trick you, the faster you act, the less likely you are to lose your money or identity.
- Avoiding student loan scams (n.d.)
- FTC sends more than $1.7 million in refunds to people who lost money to student loan debt relief scam. (2021).
- FTC, state law enforcement partners announce nationwide crackdown on student loan debt relief scams. (2017)
- Who's my student loan servicer? (n.d.)
Page last reviewed: April 27, 2022
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