5 Student Loan Forgiveness Scams to Look out for in 2019

Trish Sammer Updated on May 3, 2019

A promise to help you get out of debt or default ... for a fee. A secret student loan forgiveness program you never heard of, but that you magically qualify for. Offers from companies with no website or phone number. Oh, and hurry! This offer is limited-time only. In case you haven't guessed, these are just some of the student loan forgiveness scams you may run into in 2019.

Read on for how to spot them.

1. Promises of help for a fee

Is a company offering you help in exchange for some up-front cash? If so, your BS detector should be going off.

If you’re told you’ll be charged to consolidate your loans, to qualify for lower monthly payments, or to have loans forgiven, you’re dealing with a scammer.

If you have federal loans, you’ll always have access to help—for free—through the U.S. Department of Education.

Visit StudentLoans.gov and submit a free application for a Direct Consolidation Loan. Or explore your repayment plan options on the Federal Student Aid website.

You can also contact the federal Loan Consolidation Information Call Center at 800-557-7392.

2. Promises to get you out of default for a fee

You can get your federal loans out of default in three different ways without a participation fee.

They are:

  1. Paying your debt in full.
  2. Going through loan rehabilitation, which is a period of several months in you make agreed-upon payments to clear your defaulted status.
  3. Consolidation, in which you join together multiple federal student loan payments into one.

Your loan holder is required by the federal government to work with you to ensure the payments you make through rehabilitation or consolidation are affordable.

It's important to note that collection and legal costs may be legitimate. Program participation fees are not.

New call-to-action

3. Promises to get your student loans forgiven

Any company that promises to reduce what you owe on your student loans likely lying.

Federal student loan forgiveness programs are available for public servants, teachers and—in some states— doctors and lawyers.

If you are eligible for these programs, you must meet eligibility requirements and have a reliable payment history before being able to take advantage of forgiveness.

4. Offers from a company you've never heard of or can't find online

Did you get an unsolicited call or text about help with your student loan debt and then were unable to find an online presence for the company?

That’s a good indicator the company is running a scam. If you have federal loans, you should deal with your student loan servicer directly or get information from the Federal Student Aid website. If you have private loans, you should contact your servicer to see what repayment or forgiveness programs it offers.

5. Promises tied to a limited offer

Legitimate loan repayment and forgiveness programs are always available to those who qualify. Any message that you must “act fast” or that indicates that an offer has limited availability is a red flag.

What if you've already fallen victim to one of these scams?

If you’ve fallen for a student loan scam, take these steps as soon as possible:

  • Call the three major credit bureaus—Equifax, Experian and TransUnion—to report possible fraud and put a freeze on your credit report.
  • If you gave out your FSA ID, contact the Office of the Inspector General, where they will help you decide the best course of action.
  • Consider lodging a complaint against the business with the Consumer Financial Protection Bureau on its complaint site or by calling 855.411.2372.
  • Contact your bank or credit card company to see if you can stop payment on an advance fee.

Legitimate student loan forgiveness companies

Psych—there are none.

Seriously. If you’re hearing from a company that says it can get your student loans forgiven, just shortcut straight to “scam.” Don’t pass go. Don’t give them $200.

That said, there are legitimate student loan forgiveness programs out there. These include:

The Public Service Loan Forgiveness Program

This program will forgive your federal loans after making 120 qualifying payments while working for a qualifying employer.

See Also: What Is Public Service Loan Forgiveness?

Income-Driven Repayment Plans

These plans reset your federal loan payments to 10-20% of your “discretionary income” (as determined by the government). After 20-25 years, you can get your loans forgiven.

See Also: Beginners' Guide to Income-Driven Repayment Plans

Job-based student loan forgiveness

In many states and professions, you can get your loans forgiven for working in a high-needs area. These awards often provide more money than PSLF, and for a shorter time commitment.

See Also: The Ultimate List of Grants to Pay Off Student Loans

Employer student loan forgiveness

Some companies offer student loan forgiveness programs for employees. Find out more info here.

Military student loan forgiveness

The military also offers programs for people who enlist—to pay your tuition if you haven’t enrolled in school, or to help with your student loans if you have. Find out more here.

Legitimate lenders

Private lenders aren’t likely to forgive your loan completely—but they can help you reduce your monthly payments and the interest you pay over the long term through refinancing.

Whether you have private or federal loans, your best bet is to contact your student loan servicer as soon as you experience challenges with the repayment process to see how you can make it more manageable.

Learn more about how to pay off your student loans.

Published in: Forgiveness

About the Author
Trish Sammer

Trish Sammer is Nitro's managing editor. Her work has appeared in Woman’s Day, Redbook, Huffington Post, TechCrunch, and Forbes. She has also written for various corporate clients, including the tech giant SAP, The Franklin Institute, and PSE&G. When Trish isn’t busy acting as a writing ninja for other people, you can find her … well, writing about other stuff, like divorce and blended family life. She lives outside of Philadelphia with her husband, their combined brood, and the world’s laziest dog. Read more by Trish Sammer

Refinance and Save Today With These Lenders

#1 - Nitro Recommended View More Details

Special offers for medical resident and fellow refinance products

  • APR: 1.89% - 6.77%
  • Minimum credit score: 660
  • No Maximum when refinancing
View More Details
Visit Splash View Loan Disclosure

Splash Financial is a leader in student loan refinancing with new rates as low as 3.25% fixed APR which can save you tens of thousands of dollars over the life of your loans. No application or origination fees and no prepayment penalties. Splash Financial is in all 50 states and is intensely focused on customer service. Splash Financial is also one of the few companies that offers a great medical resident and fellow refinance product. You can check your rate with Splash in just minutes.

  • Low interest rates – especially for graduate students
  • No application or origination fees. No prepayment penalties.
  • Co-signer release program - you can apply for a cosigner release form your loan after 12 months of on-time payments
  • Specialty product for doctors in training with low monthly payment

Click here to see more of Splash's offerings and to see how you can save money.

#2 View More Details

Earnest empowers people with the financial capital they need to live better lives.

  • APR: 1.99% - 5.79%
  • Minimum credit score: 650
  • Refinance up to $500K
View More Details
Visit Earnest View Loan Disclosure

Using technology, data, and design to build affordable products, Earnest's lending products are built for a new generation seeking to reach life's milestones. The company understands every applicant's unique financial story to offer the lowest possible rates and radically flexible loan options for living life.

  • Commitment-free 2 minute rate check
  • Client Happiness can be reached via in app messaging, email, and phone 
  • No fees for origination, prepayment, or loan disbursement
  • Flexible terms let you pick your exact monthly payment or switch between fixed and variable rates
  • Skip a payment and make it up later
  • Online dashboard is designed to make it easy to apply for and manage your loan

Click here to apply with Earnest and to see how much you can save.

#3 View More Details

Operates in all 50 states; 2nd largest student loan refinancing lender

  • APR: 1.99% - 6.20%
  • Minimum credit score: 660
  • No refinancing amount maximum
View More Details
Visit Laurel Road View Loan Disclosure

Laurel Road is a national online lender with customers in all 50 states, the District of Columbia, and Puerto Rico. Many of our non-bank competitors are not able to lend in all 50 states.Laurel Road has grown to be the second largest player in the student loan refinancing space in large part because of our reputation as the go-to low rate provider.

Laurel Road Student Loan Refinance Review

  • National reach - Online lender that is available in all 50 US states, the District of Columbia and Puerto Rico.
  • No fees & the lowest rates in the space - Laurel Road is the most transparent about the rates they provide customers, and offer the lowest rates where it counts. Our customers will save more than $20,000 over the life of their loans on average. 
  • Customer service reputation - Laurel Road's customer service representatives are no rookies. With 19 years of experience on average, Laurel Road’s Customer Service team delivers an experience that is best in the industry. They work to build meaningful, life-long relationships with our valued customers to improve their overall financial wellness.
  • The stability & security of a bank - They are a division of Darien Rowayton Bank, a stable and secure FDIC-insured bank, regulated by the FDIC and the Connecticut Department of Banking.

Get your personalized, pre-approved rates in less than 5 minutes.

#4 View More Details

Credible is an online marketplace that provides borrowers with competitive, personalized loan offers from multiple, vetted lenders in real time.

  • Free to use, no hidden fees
  • Minimum credit score: 650
  • No refinancing maximum amount
View More Details
Visit Credible View Loan Disclosure

Credible is a multi-lender marketplace that empowers consumers to discover student loan refinancing options that are the best fit for their unique circumstances. Our integrations with leading lenders and credit bureaus allow consumers to quickly compare accurate, personalized loan options ― without putting their personal information at risk or affecting their credit score. The Credible marketplace provides an unrivaled customer experience, as reflected by over 2,000 positive Trustpilot reviews and a TrustScore of 9.5/10. Credible is headquartered in San Francisco, California.

For more information, click here to apply now with Credible.

  • Compare prequalified rates from multiple, vetted lenders in 2 minutes.
  • Refinance federal, private and ParentPLUS loans.
  • San Francisco-based customer support 7 days a week.
  • Checking your rates won't affect your credit score.
  • Get your final offer in as little as 1 business day.
  • Credible’s partner lenders do not charge prepayment penalties, loan application fees, or origination fees.
  • Free to use, no hidden fees: Requesting rates can take just minutes and costs you nothing.
#5 View More Details

For every loan they fund, they contribute to the education of a child in need

  • APR: 1.99% - 5.79%
  • Minimum credit score: 660
  • Refinance up to $500K
View More Details
Visit CommonBond View Loan Disclosure

CommonBond was founded in 2011 by three MBA graduates from the University of Pennsylvania’s Wharton School who wanted to help their peers escape from high-interest student loan debt. Its original focus was on grad students, but it has since expanded to cover undergrads as well.

Of all the companies we reviewed, CommonBond has some of the best customer service. The company prides itself on being easy to reach by email, phone, or live chat. It offers networking events, expert panels, insider newsletters, and even has a program help borrowers who lose their jobs to find new ones. CommonBond also makes you feel good about choosing to refinance with them by donating money to an education nonprofit for each loan they write.

CommonBond Student Loan Refinance review

  • Unemployment protections - If you lose your job or decide to go back to school, you can delay your payments for up to 24 months.
  • Social promise - For every loan they fund, they also contribute to the education of a child in need.
  • Hybrid loan option - Offerings include a 10-year hybrid loan with fixed interest for the first five years, and variable interest for the final five.
  • Referral bonus - For every friend you refer who refinances their loans with CommonBond, you’ll earn a $200 cash bonus.
  • Qualification - Borrowers must have graduated at least 2 years prior if they want to apply without a co-signer. And borrowers in 6 states – Idaho, Louisiana, Mississippi, Nevada, South Dakota, and Vermont – cannot currently refinance through CommonBond.

Get a personalized review of your refinancing options with CommonBond today.

#6 View More Details

Works with 300+ community lenders for higher approval chances

  • APR: 1.99% - 8.77%
  • Minimum credit score: 660
  • Refinance up to $300K
View More Details
Visit LendKey View Loan Disclosure

Connecting student borrowers to a network of over 300 community lenders with low interest rates. By partnering with these lenders, LendKey is able to give consumers direct access to the best rates available from the most borrower friendly institutions. As the servicer of all loans obtained through its platform, you can rest easy knowing your personal information will be safe and that the best customer service team will be ready to answer your questions from application until your final payment.

LendKey Student Loan Refinance review

  • Lightning fast rate check - 2-minute rate check with no impact on your credit score
  • More lenders, more options - see the best offers from over 300+ community lenders for higher approval chances
  • Life of loan relationship - With LendKey, your personal information will never be sent or passed on to third parties. Their customer service team is with you from the moment you land on their website until you've completely repaid your loan.
  • Unmatched benefits- Community lenders put people over profits and offer unique benefits like cosigner release after 12 on-time payments, interest only repayment options to keep monthly payments low, the largest unemployment protection period in the market, and more.

Get a personalized quote from LendKey now.

#7 View More Details

Many ELFI customers save hundreds per month month and thousands over the length of the loan term.

  • APR: 2.39% - 5.99%
  • Minimum credit score: 680
  • No refinancing maximum amount
View More Details
Visit ElFi View Loan Disclosure

Education Loan Finance is designed to assist borrowers through consolidating outstanding education loans into one single loan that effectively lowers your costs of education and/or makes repayment very simple. Education Loan Finance - backed by the strength of SouthEast Bank - combines the benefits of traditional education loan refinancing with the superior products, service, and support found in the private market.

Education Loan Finance (ElFi) review

Check out their low rates today to see how much you can save.

  • Get Your Rate. With Education Loan Finance's Find My Rate tool, you can complete a short application to receive a preliminary quote on your eligible rates and terms, all without affecting your credit score.
  • Apply in Minutes. Education Loan Finance's online application is fast and simple.
  • Outstanding Personalized Service. Our Personalized Loan Advisors specialize in student loan refinancing and help busy professionals find the option that's right for them.
  • Student Lending Experience: Education Loan Finance isn't a start-up company - we have a longstanding history and expertise in serving student loan borrowers.

Attractive Bonus and Referral Programs:

  • Education Loan Finance Referral Program**: Earn $400 for each new Education Loan Finance Client referred by you!

I reduced my student loan payment by $152 per month, by refinancing thru Nitro:

Save Money Now