How to Identify Student Loan Scams

Even highly educated borrowers, like a Harvard graduate and Notre Dame professor I once worked with, have told me that navigating student loan repayment alone feels nearly impossible. StudentAid.gov and loan servicers do provide resources, but the sheer volume of information, constant rule changes, and maze of repayment pathways can leave anyone overwhelmed. 

That complexity creates an opening for companies that overpromise or misrepresent “forgiveness.” Too often, borrowers are told something that sounds too good to be true—and it is. 

Just last month, the FTC refunded $743,230 to more than 6,200 borrowers who had been scammed by debt relief companies charging upfront fees and falsely claiming government affiliation. These companies promised to take over servicing, manage enrollment, or guarantee forgiveness but in reality, they pocketed the money and left borrowers worse off, sometimes even delaying their progress toward legitimate programs. 

Watch for Red Flags 

When looking for trusted, third-party advice, here are warning signs that should raise concern: 

• Promises of instant or total loan forgiveness 

  • Forgiveness programs require years of qualifying payments—there is no shortcut or early access. 

• Requests for your FSA ID, password, or sensitive information 

  • Your FSA ID is the key to your federal loans. Sharing it hands over control you should never lose. 

• Urgency or pressure tactics 

  • Scammers rely on panic. Federal repayment and forgiveness programs don’t vanish overnight—they follow published timelines. 

• Signing over control without oversight 

  • Some companies submit paperwork behind the scenes and charge monthly fees, leaving you uninformed and disconnected from your own loans. Oversight by the borrower is critical. 

How SDS Is Different 

At Student Debt Solutions, our platform models every legitimate repayment and forgiveness program, giving borrowers a clear picture of their real options. Our trained team walks with you step-by-step, helping you understand timelines, eligibility, and next actions. 

• You always retain access to your account. 

• You make the final decisions about your repayment plan. 

• You can choose the level of support that fits your needs, whether that’s quick guidance or hands-on help. 

Borrowers deserve reliable, expert help, not high-fee shortcuts or confusing promises. At SDS, our mission is built on trust, transparency, and your financial well-being. We’re here to ensure you can move toward debt freedom with clarity and confidence—supported every step of the way. Check out how SDS can help.