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Cheated by a Student Loan Forgiveness Scam? What to Do Next
You can only get student loan forgiveness through the federal government — not a private debt relief company.
Many, or all, of the products featured on this page are from our advertising partners who compensate us when you take certain actions on our website or click to take an action on their website. However, this does not influence our evaluations. Our opinions are our own. Here is a list of our partners and here's how we make money.
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Teddy is a former student loans writer with NerdWallet, where she covered topics around managing money before, during and after college. Her work has been featured by The Associated Press, USA Today, the Chicago Tribune and Reuters.
Des Toups was a lead assigning editor who supported the student loans and auto loans teams. He had decades of experience in personal finance journalism, exploring everything from car insurance to bankruptcy to couponing to side hustles.
Anna Helhoski is a senior writer covering economic news and trends in consumer finance at NerdWallet. She cohosts and produces Money News segments of NerdWallet's Smart Money podcast. She is also an authority on student loans. She joined NerdWallet in 2014. Her work has been syndicated in news outlets nationwide including The Associated Press, The New York Times, The Washington Post and USA Today. She previously covered local news in the New York metro area for the Daily Voice and New York state politics for The Legislative Gazette. She holds a bachelor's degree in journalism from Purchase College, State University of New York.
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Dozens of companies charge high fees and claim to help borrowers get student loan forgiveness or debt relief. But if you're dealing with anyone but the federal government or a nonprofit, it's a scam.
That doesn't mean you’re stuck. You can end contact with such companies and apply to federal student loan programs that could reduce your debt or eventually lead to forgiveness through U.S. Department of Education websites. And those programs are free.
Here’s what to do if you’re involved with a misleading student loan relief company:
1. Sever your connection with the company
Call the company to request a refund and cancel your contract, if you signed one. If you’ve set up automatic payments, alert your bank or credit card issuer that you no longer authorize charges from the “debt relief” company.
The company may not respond or cooperate with your request to cancel. You can stop making payments anyway, says Persis Yu, director of the Student Loan Borrower Assistance Project at the National Consumer Law Center.
“Given that these companies exist on the fringe of legitimacy,” Yu says, “I think borrowers should feel OK to stop making payments.”
However, there’s an “outside possibility” that the company could sue you for breach of contract or send your bill to collections, she adds.
Once you’ve cut off contact with the company, monitor your personal and financial information for a while afterward, says Suzanne Martindale, a staff attorney at Consumers Union. Make sure that you’re no longer being charged and that negative marks don’t appear on your credit report.
NerdWallet ratingNerdWallet's ratings are determined by our editorial team. The scoring formula for student loan products takes into account more than 50 data points across multiple categories, including repayment options, customer service, lender transparency, loan eligibility and underwriting criteria.
Fixed APR
3.24-17.99%
College Ave Student Loans products are made available through Firstrust Bank, member FDIC, First Citizens Community Bank, member FDIC, or M.Y. Safra Bank, FSB, member FDIC. All loans are subject to individual approval and adherence to underwriting guidelines. Program restrictions, other terms, and conditions apply. (1)All rates include the auto-pay discount. The 0.25% auto-pay interest rate reduction applies as long as a valid bank account is designated for required monthly payments. If a payment is returned, you will lose this benefit. Variable rates may increase after consummation. (2)As certified by your school and less any other financial aid you might receive. Minimum $1,000. (3)This informational repayment example uses typical loan terms for a freshman borrower who selects the Flat Repayment Option with an 8-year repayment term, has a $10,000 loan that is disbursed in one disbursement and a 7.78% fixed Annual Percentage Rate (“APR”): 54 monthly payments of $25 while in school, followed by 96 monthly payments of $176.21 while in the repayment period, for a total amount of payments of $18,266.38. Loans will never have a full principal and interest monthly payment of less than $50. Your actual rates and repayment terms may vary. Information advertised valid as of 5/29/2025. Variable interest rates may increase after consummation. Approved interest rate will depend on creditworthiness of the applicant(s), lowest advertised rates only available to the most creditworthy applicants and require selection of the Flat Repayment Option with the shortest available loan term.
Variable APR
4.24-17.99%
College Ave Student Loans products are made available through Firstrust Bank, member FDIC, First Citizens Community Bank, member FDIC, or M.Y. Safra Bank, FSB, member FDIC. All loans are subject to individual approval and adherence to underwriting guidelines. Program restrictions, other terms, and conditions apply. (1)All rates include the auto-pay discount. The 0.25% auto-pay interest rate reduction applies as long as a valid bank account is designated for required monthly payments. If a payment is returned, you will lose this benefit. Variable rates may increase after consummation. (2)As certified by your school and less any other financial aid you might receive. Minimum $1,000. (3)This informational repayment example uses typical loan terms for a freshman borrower who selects the Flat Repayment Option with an 8-year repayment term, has a $10,000 loan that is disbursed in one disbursement and a 7.78% fixed Annual Percentage Rate (“APR”): 54 monthly payments of $25 while in school, followed by 96 monthly payments of $176.21 while in the repayment period, for a total amount of payments of $18,266.38. Loans will never have a full principal and interest monthly payment of less than $50. Your actual rates and repayment terms may vary. Information advertised valid as of 5/29/2025. Variable interest rates may increase after consummation. Approved interest rate will depend on creditworthiness of the applicant(s), lowest advertised rates only available to the most creditworthy applicants and require selection of the Flat Repayment Option with the shortest available loan term.
NerdWallet ratingNerdWallet's ratings are determined by our editorial team. The scoring formula for student loan products takes into account more than 50 data points across multiple categories, including repayment options, customer service, lender transparency, loan eligibility and underwriting criteria.
Fixed APR
3.19-16.99%
Lowest rates shown include the auto debit discount. Advertised APRs for undergraduate students assume a $10,000 loan to a student who attends school for 4 years and has no prior Sallie Mae-serviced loans. Interest rates for variable rate loans may increase or decrease over the life of the loan based on changes to the 30-day Average Secured Overnight Financing Rate (SOFR) rounded up to the nearest one-eighth of one percent. Advertised variable rates are the starting range of rates and may vary outside of that range over the life of the loan. Interest is charged starting when funds are sent to the school. With the Fixed and Deferred Repayment Options, the interest rate is higher than with the Interest Repayment Option and Unpaid Interest is added to the loan’s Current Principal at the end of the grace/separation period. To receive a 0.25 percentage point interest rate discount, the borrower or cosigner must enroll in auto debit through Sallie Mae. The discount applies only during active repayment for as long as the Current Amount Due or Designated Amount is successfully withdrawn from the authorized bank account each month. It may be suspended during forbearance or deferment. Advertised APRs are valid as of 6/23/2025. Loan amounts: For applications submitted directly to Sallie Mae, loan amount cannot exceed the cost of attendance less financial aid received, as certified by the school. Applications submitted to Sallie Mae through a partner website will be subject to a lower maximum loan request amount. Miscellaneous personal expenses (such as a laptop) may be included in the cost of attendance for students enrolled at least half-time. Examples of typical costs for a $10,000 Smart Option Student Loan with the most common fixed rate, fixed repayment option, 6-month separation period, and two disbursements: For a borrower with no prior loans and a 4-year in-school period, it works out to a 10.28% fixed APR, 51 payments of $25.00, 119 payments of $182.67 and one payment of $121.71, for a Total Loan Cost of $23,134.44. For a borrower with $20,000 in prior loans and a 2-year in-school period, it works out to a 10.78% fixed APR, 27 payments of $25.00, 179 payments of $132.53 and one payment of $40.35 for a total loan cost of $24,438.22. Loans that are subject to a $50 minimum principal and interest payment amount may receive a loan term that is less than 10 years. A variable APR may increase over the life of the loan. A fixed APR will not.
Variable APR
4.37-16.49%
Lowest rates shown include the auto debit discount. Advertised APRs for undergraduate students assume a $10,000 loan to a student who attends school for 4 years and has no prior Sallie Mae-serviced loans. Interest rates for variable rate loans may increase or decrease over the life of the loan based on changes to the 30-day Average Secured Overnight Financing Rate (SOFR) rounded up to the nearest one-eighth of one percent. Advertised variable rates are the starting range of rates and may vary outside of that range over the life of the loan. Interest is charged starting when funds are sent to the school. With the Fixed and Deferred Repayment Options, the interest rate is higher than with the Interest Repayment Option and Unpaid Interest is added to the loan’s Current Principal at the end of the grace/separation period. To receive a 0.25 percentage point interest rate discount, the borrower or cosigner must enroll in auto debit through Sallie Mae. The discount applies only during active repayment for as long as the Current Amount Due or Designated Amount is successfully withdrawn from the authorized bank account each month. It may be suspended during forbearance or deferment. Advertised APRs are valid as of 6/23/2025. Loan amounts: For applications submitted directly to Sallie Mae, loan amount cannot exceed the cost of attendance less financial aid received, as certified by the school. Applications submitted to Sallie Mae through a partner website will be subject to a lower maximum loan request amount. Miscellaneous personal expenses (such as a laptop) may be included in the cost of attendance for students enrolled at least half-time. Examples of typical costs for a $10,000 Smart Option Student Loan with the most common fixed rate, fixed repayment option, 6-month separation period, and two disbursements: For a borrower with no prior loans and a 4-year in-school period, it works out to a 10.28% fixed APR, 51 payments of $25.00, 119 payments of $182.67 and one payment of $121.71, for a Total Loan Cost of $23,134.44. For a borrower with $20,000 in prior loans and a 2-year in-school period, it works out to a 10.78% fixed APR, 27 payments of $25.00, 179 payments of $132.53 and one payment of $40.35 for a total loan cost of $24,438.22. Loans that are subject to a $50 minimum principal and interest payment amount may receive a loan term that is less than 10 years. A variable APR may increase over the life of the loan. A fixed APR will not.
Credible lets you check with multiple student loan lenders to get rates with no impact to your credit score. Visit their website to take the next steps.
2. Alert your lender or servicer
Call your federal student loan servicer or private lender and explain that you’ve paid a third-party company for student loan assistance.
If you don’t know who your servicer is, log into the Federal Student Aid website to check. Your loans are likely private if you don’t see them listed on the government’s website, but they will appear on your credit report. If you have more than one loan, you may have accounts at multiple servicing companies.
If the agent from the loan servicing company you speak with isn’t helpful, ask to talk with their manager, says Robyn Smith, an attorney who works with Yu at the NCLC and also at the Legal Aid Foundation of Los Angeles.
“Take it as high as you can,” Smith says.
3. Regain control of your student loan account
If you’ve given the “debt relief” company access to your student loan account through a power of attorney form, revoke that agreement. To do so, contact your lender or servicer in writing and attach the original agreement if you have it. Send a copy of the letter to the debt relief company.
Smith suggests saying something in the letter to the servicer like, “I am notifying you that I am revoking the attached consent. As of today, please stop all communications regarding my account with [the debt relief company’s name].”
You may need to get the statement notarized if your servicer requires it, Yu adds. Even if it doesn't require it, notarizing the statement will help it carry more weight. Make copies of the statement and save them for your records.
Once you regain control of your student loan account, resume making loan payments to your federal loan servicer or lender if you stopped.
4. Use existing federal loan help
Despite what it might claim, there’s nothing a student “debt relief” company can do that you can’t do for free through the Department of Education or your federal loan servicer. That includes:
Federal student loan consolidation, which won’t lower your interest rate but may be necessary to qualify for certain repayment plans and forgiveness programs.
Income-driven repayment plans, which cap your monthly payment at a percentage of your income and forgive your remaining balance after 20 or 25 years.
Federal loan forgiveness programs, which can cancel some or all student debt for borrowers who qualify based on their employer, profession or loan type. However, the forgiveness is not immediate, as some student debt "relief" outfits may imply.
Deferment and forbearance, which provide temporary periods of payment relief but grow your balance as interest continues accruing.
Also, you can refinance your student loans through a private company if you have good credit and enough income to comfortably afford payments. However, in doing so you’ll give up access to the federal loan programs listed above.
5. Seek legitimate professional help
If you’re looking for a professional with whom to discuss your student loan situation, a certified student loan counselor trained by the National Foundation for Credit Counseling is a safe option. These advisors work for nonprofit credit counseling agencies and provide one-on-one services for free or nominal costs. You can locate a counselor on the NFCC’s student loan help website.
For more complicated problems, such as navigating default or dealing with collectors, it may be smart to contact a student loan lawyer. Some legal aid nonprofits have expertise in student loan issues and can assist you for free or at a reduced rate. Search for your local organization and ask if it or another organization can help.
6. Make a complaint
It may feel like shouting into a void, but filing complaints is a crucial step. Government officials base their investigations of fraudulent companies on consumer complaints. Filing one also increases chances of getting your money back.
