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Scammers & Student Loans

Updated: May 25

On June 30, 2023, the Supreme Court of the United States (SCOTUS) released its opinions on two matters (Department of Education v. Brown and Biden v. Nebraska) related to the Biden Administration’s student-loan debt-forgiveness plan (Plan).  As written and intended, the Plan was set to discharge $10,000 to $20,000 of an eligible borrower’s debt, conditional on multiple criteria, including the borrower’s annual income (with its own caveats surrounding tax filings) and the specific type of loan in the borrower’s name.


The High Court’s opinions significantly impacted the nation, sparking discussions on various media platforms, including radio, television, and social media – likely adding lively debates at many Independence Day gatherings. However, the consequences of striking down the Plan are still unfolding and have implications that both directly and indirectly affect tens of millions of borrowers, all of whom should monitor this situation closely.


Make no mistake about it – cybercriminals are predators.  They prey on the unsuspecting and the vulnerable.  These criminals are nothing if not opportunistic and exploitative.  Within 24 hours of SCOTUS making public their opinion striking down the Plan, the FTC released an Alert to all who may be impacted to watch for scammers seeking to spread misinformation and profit through tricking and deceiving borrowers.


The Alert offers guidance to borrowers, encouraging them to prepare for loan repayment as soon as possible by 1) finding out who their loan servicer is by checking their Federal Student Aid Dashboard; 2) updating their contact information with FSA and the loan servicer on their account; and 3) enrolling in a repayment plan.  But the Alert also offers cautionary recommendations, to help spot and avoid being scammed, such as:


  • Do NOT pay a third party to assist you with your federal student loans. Any companies offering to help for a cost, are simply trying to exploit an individual who can do the same things themselves at no cost;

  • Keep your FSA ID login information private and confidential. Do not share this information with anyone, and if anyone asks for such information – they are likely a scammer seeking to steal your identity and/or insert themselves via a “man-in-the-middle” scam, cutting off the borrower from their loan servicer; and

  • Stay alert for attempts to contact you promising debt relief or loan forgiveness.

This third point will likely bring back memories of automated voices “trying to reach you regarding your car’s extended warranty.”  These scams will try to sound legitimate, will likely reference the Department of Education, and may even involve fake names, seals, logos, reference numbers, etc.  Do not buy in.  Log into your FSA and loan servicer account and review the options which that entity lists.


With repayments set to begin in October (and interest rates kicking back in as early as September 1), individuals and industries are left bracing for what is anticipated to be a massive cutback in discretionary spending.  Those who saw debt relief in the form of the reduction or wiping clean their student loans, are now faced with the harsh reality of resuming payments and adjusting their budgets and lifestyles accordingly.


This is not the last we will hear about student loans, forgiveness. With elections a mere 4 months away, and a presidential election set for 2024, the discussions around debt relief and loan forgiveness are not going anywhere.  Remember that there are legitimate programs that exist, and your individual loan servicer and FSA are there to offer real solutions to assist borrowers in their repayments.


Stay vigilant, and do not be discouraged.  The fight against cybercrime is ongoing and ever-evolving, and we all have a role to play against the ever-evolving threat actors.  If you spot a potential scam, do not hesitate to contact the FTC, and report it at https://reportfraud.ftc.gov/.

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