Coronavirus Student Loan Scams

Written by: Kristyn Pilgrim
Updated: 9/10/20

When the coronavirus became part of our everyday lives, so did the scams that come along with it. Student loan scams are no different. With so many people laid off or losing their jobs, they may try to find financial relief in any way they can. So, when borrowers hear that their student loan debt can be forgiven for a fee significantly lower than what they owe, they may jump at the chance. 

But what kind of student loan scams are out there? And what should people keep in mind so that they do not fall for one or more of these tricks? In this article, you will learn ways to avoid coronavirus student loan scams and what to do if you become a victim.

Federal Student Loan Relief Through the CARES Act

To help those impacted by the coronavirus, the Coronavirus Aid, Relief, and Economic Security (CARES) Act puts most federal student loan payments on administrative forbearance through Sept. 30, 2020. This deferment means federal student loan borrowers will not have to make any payments until October. Also, during this time, the interest rate on these types of loans has been reduced to 0%. If borrowers still want to make the payments, it will be interest-free until the relief ends.

However, this relief only extends to federal student loan borrowers. Private student loans are not included in this relief package. This change occurs automatically, and borrowers do not need to take any further action. But certain federal student loans are not held by the government, and the CARES Act does not cover them. 

The federal student loans that do not qualify for administrative forbearance are those held by educational institutions, such as Perkins Loans, and those held by commercial lenders.

Loans that do not initially qualify for federal relief could become eligible if they are included in a Direct Consolidation Loan. However, this may affect the benefits available on these loans, according to the Conference of State Bank Supervisors

To determine which student loans qualify for relief, you should contact your student loan servicer, pull your credit report and compare it to the official list of federal loan servicers, or call the Federal Student Aid office Information Center at 1-800-433-3243. Your loan servicer’s website may also have information about what qualifies. 

Coronavirus-Related Student Loan Scams

Unauthorized Student Loan Forgiveness Programs

There are a host of coronavirus-related false promises, and student loan forgiveness is part of the mix. According to the National Education Association (NEA), the federal government doesn’t approve or recommend any debt relief companies. There are no government-backed student loan forgiveness plans related to the coronavirus pandemic as of now, either. 

Some of these companies are trying to con people out of their money by claiming they will forgive their student loans if the borrower pays an upfront fee, which is substantially lower than what is owed. Once the payment is received, the person may never be able to get in touch with the fake company again, and the money could be gone forever.

The Federal Trade Commission (FTC) and many law enforcement agencies are trying to help consumers avoid this type of fraud. Here are some tips to help people distinguish help from reputable sources from those who are just out for people’s money:

  • If the person claims they are with the government and asks for money, it’s fake. A fee is never required by the government to receive help with student loans. 
  • If a borrower receives a call from someone who claims to be a government agency, and they ask for a bank account number, credit card number, Medicare number, or Social Security Number, this is not a credible phone call. 
  • If you took out private student loans to attend school, those companies will more than likely not forgive your debt. If any company promises to do so, it’s probably a scam.

Paying a Fee to Suspend Student Loan Payments

Not only are people receiving phone calls about student loan forgiveness, but some companies are also trying to convince borrowers to pay fees to suspend payments

The CARES Act automatically placed federal student loan borrowers into administrative forbearance. There is no action required to receive this benefit. If you are a federal student loan borrower and are receiving calls for personal information or a fee to suspend payments, double-check who is calling because it is likely a fraudulent company. The government will never charge a fee for help with student loans.  

According to the Office of the Attorney General for the District of Columbia, student loan borrowers should pay close attention to the name of the people or company that is contacting them. If the company has the words “national” or “federal” in them and claims they have a relationship with the United States Department of Education, it is probably a fake company. 

If a borrower is ever asked for their Federal Student Aid (FSA) personal identification number, they should never give it out. If someone other than the borrower has this four-digit number, they could potentially make unwanted changes to the borrower’s account.

What to Do If You Get a Fraudulent Call

If you have received a phone call that you suspect is fraudulent, the FTC asks that you report the person or company by filing a complaint. Generally, requiring payment to help with student loans should be a red flag that a company or person is trying to be deceptive. 

The FTC says that the amount of information those filing a complaint provide is entirely up to them, but the more information, the better. Once the report is complete, it is shared with the person’s local, state, federal, and foreign law enforcement partners. The claim can be used for investigation purposes, but the FTC does not resolve individual complaints. 

Also, the organization asks that if someone does file a complaint, they offer their contact information in case more information is needed. 

The form continues to ask specifics about the person’s encounter, such as when the event took place, how the company or person contacted the student loan borrower, and how the person responded to the initial contact. 

The next sections ask if the loan borrower lost money during this interaction, who the complaint is toward, questions about the person filing the claim, and what happened on the day the call occurred. 

Once all sections of the report are complete, it can be submitted for review.  

Get Armed With Information

With so many people and companies trying to profit from the coronavirus pandemic, practicing caution and conducting further research could keep money in your pocket. Being armed with information can only help when trying to understand your options as a consumer and student loan borrower. 

But in doubt, try to avoid making any rash decisions. Even if a scammer on the phone is pressuring you to make a decision right then, let them know that you want to do proper research first. If the promises coming from the person on the other side sound too good to be true, it usually is when it comes to student loan debt. has a great deal of information that can be helpful when trying to learn more about student loans. We even have a section about what to ask your student loan servicer about coronavirus relief.

Whether you need information about planning for the financials of college, the difference between specific types of loans, or the different ways student loans can be repaid, can help. 

Our staff writers and editors have collectively borrowed hundreds of thousands of dollars and are willing to give you firsthand knowledge on how to navigate such a complicated time. We want to help students, parents, and graduates make informed choices about financing their college education.