The Rise of Student Loan Scams: What Borrowers Should Know This Fall

As we head into the fall semester, student loan scammers are ramping up sophisticated schemes targeting financially stressed student loan borrowers. With confusion over federal loan forgiveness programs, fraudsters see a perfect opportunity to exploit desperation. Here’s a breakdown of what to watch for and how to stay safe. 

Why Student Loan Scams Are Surging Now 

Policy uncertainty: The disruption of student loan forgiveness plans and complex changes to repayment options have left many borrowers anxious and vulnerable. 

Scammers filling the void: Fraudsters promise immediate relief or “special access” to student loan forgiveness programs — services that are often free if you go through official federal loan channels. 

Real consequences: The FTC recently sent $743,230 in refunds to more than 6,000 borrowers who were duped by student debt relief scams posing as legitimate organizations. 

Common Student Loan Scam Tactics to Spot 

Red Flag: Upfront or monthly fees
Why It’s Suspicious: All federal student loan servicing is free. 

Red Flag: Guaranteed or instant forgiveness
Why It’s Suspicious: Student loan forgiveness programs require years of qualifying payments. 

Red Flag: Requests for FSA ID or password
Why It’s Suspicious: Scammers can take control of your Federal Student Aid account. And it’s worth knowing that the U.S. Department of Education and its partners will never ask for your login information. 

Red Flag: Pressure to act immediately
Why It’s Suspicious: High-pressure student loan scams use urgency to avoid scrutiny. 

Red Flag: Official-looking logos or names
Why It’s Suspicious: Scammers counterfeit .gov websites and logos to appear credible. 

Red Flag: Spelling/grammatical errors
Why It’s Suspicious: Poor presentation often signals online loan fraud. 

Fraud operations impersonate trusted institutions, such as the U.S. Department of Education or federal student loan servicers, even though they’re not affiliated with them. 

How to Stay Protected Against Student Loan Fraud

As student loan scams rise this fall, IDSeal® can play a vital role in protecting borrowers. By giving you real-time alerts and visibility into your financial footprint, IDSeal’s identity theft protection helps stop fraud before it spirals out of control. Here are just a few features that work together to spot red flags early. 

 

• Instant Credit Application Monitoring: Alerts you when your information is used for new credit checks, including student loan applications in your name. This can quickly flag unauthorized attempts to take out loans using your identity. 

• Financial Transaction Monitoring: Monitors your bank, credit card, savings, investment, and retirement accounts for suspicious activity. This allows you to catch fraudulent withdrawals or unauthorized student loan disbursements early. 
• Credit Monitoring: Monitors up to three credit bureaus, depending on your IDSeal plan, plus full credit reports and scores. This can help you spot unrecognized student loans appearing on your credit report.

 

Student loan scams are evolving quickly, but with the right knowledge and identity protection tools, borrowers can stay one step ahead. 

 

Ready to take the next step in protecting yourself? Explore our identity protection plans and sign up with IDSeal today to see how we can help keep your identity and finances safe.