How to spot student loan forgiveness scams

October 07, 2021

By Claire Hegstrom

How to spot student loan forgiveness scams

A young man sits at a coffee shop table with his open laptop before him. He looks down at his ringing cell phone in one hand as he holds an open pad of paper in the other.

With loan payment suspensions brought on by the CARES Act soon expiring, scammers have found an additional way to try and obtain personal information from Americans across the country.

This particular scam has all the ingredients of a foolproof plan. There is a federal relief program that has a set expiration for the entire population. Scammers know a general age range to target—young professionals in their 20s who are actively paying off their federal student aid debt, and would jump at the chance for it to be erased.

The scam is timely, it makes sense, and it lacks the overtly-phishy signs we’ve been trained to look out for. I am not ashamed to say that—as someone who reviews Federal Trade Commission scam updates regularly—I almost fell for it myself. Here’s everything you need to know about the student loan forgiveness scam.

What the student loan debt forgiveness scam sounds like

Thousands of people across the country have received voicemails and phone calls with the same narrative, “Hello, this is Natalie with the student help release. I do see that you are prequalified for the student loan forgiveness program, but this deferment is actually about to expire so I don’t want your qualifications to change or for you to miss out on this opportunity.”

What makes the call even more believable is the Washington D.C. area code. “Natalie” has a cool, calm voice, is a real person—an upgrade from the usual scammer robots—and isn’t pushy, other than mentioning the expiring deferment.

Red flags that gave the scammers away

I’ll admit, student loan debt is my number one kryptonite, and I was ready to jump on this opportunity. I even called the number back to try and talk to “Natalie” about taking advantage of the forgiveness program. Fortunately, she didn’t pick up.

Then my alarm bells went off, I typed the voicemail transcription into a Google search and found that people all over the country were getting the same phone call, and that there was no magic forgiveness program.

When I stopped to think back, here are the signs I missed:

1. I was promised immediate loan forgiveness.

Public service loan forgiveness does exist, but it is a lengthy process that often involves many years of qualifying payments and employment within a specific field or type of company. These repayment and forgiveness plans are worked out with your student loan servicer, and it’s up to you to make the call to get enrolled in this plan.

2. The offer was “about to expire.”

Although “Natalie” wasn’t aggressive about it, there was a definite sense of urgency to her message that I overlooked. Her calls and voicemails were persistent, and as the CARES Act payment suspensions were about to expire (they’ve since been extended) the calls ramped up.

3. Small details didn’t match up.

Phishing is sometimes easier to spot in emails or letters because spelling errors and blurry logos can be quickly recognized. I should have noticed sooner that my phone’s caller I.D placed the call from Washington D.C. (Eastern Time Zone), but “Natalie” specifically listed available callback times followed by “Pacific Standard Time” in her voicemail.

Other reports on this scam noted the fraudsters rigged the caller I.D. to read that the location was from Washington D.C., but the phone number was not a D.C. area code.

How you can prevent falling prey to scammers

If you’ve received an email, call, voicemail, or letter about student loan forgiveness, slow down, pay attention to the details and most importantly, listen to your gut. If it’s too good to be true, it probably is.

“Biden Loan Forgiveness” and “CARES Act Loan Forgiveness” programs don’t exist. Real public service loan forgiveness programs, granted through your loan servicer, never require you to provide financial information like your bank account or routing number, and most certainly don’t require an extra payment to get started.

Pay extra caution to anyone asking for your personal information such as your social security number, bank account information or any other sensitive information regarding your accounts. This should all be entered through a secure portal online when entering a legitimate public loan forgiveness contract.

If you believe you’ve received a student loan scam call, report any information to the Federal Trade Commission (FTC) at


Looking for more tips on how to protect your finances? Check out these other blog posts:

Claire Hegstrom is an advocate of the credit union movement through and through. Passionate about financial education, she approaches money conversations from a candid and inclusive space focused on growth and awareness. As our credit union founding father, Ed Filene, once said, “Progress is the constant replacing of the best there is with something still better.” Claire hopes reading Money Mentor will help transform your life from the best to even better.

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