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: How to avoid being scammed when you apply for student-loan forgiveness


It’s open season to begin seeking student-debt relief of $10,000 — or up to $20,000 for Pell Grant recipients — but regulators worry it could also be open season for fraudsters to bilk borrowers out of money.

A day after President Joe Biden announced the launch of a Department of Education web portal to submit applications on Monday, the Federal Trade Commission highlighted the tricks and perils to avoid.

The FTC and other federal agencies have been alerting borrowers about potential scams, warning people against paying for help with a process that is free or sharing certain pieces of sensitive data with third parties.

With the application portal now open, “of course, scammers are on the move — trying to get your money and personal information,” K. Michelle Grajales, an attorney in the FTC’s Division of Financial Practices, wrote in a consumer alert.

The Biden administration’s student-loan forgiveness order would erase up to $10,000 in federal student debt for borrowers earning less than $125,000 a year. People who used Pell Grants to attend college could be poised to also get an additional $10,000, totaling $20,000 in potential relief for them.

More than 8 million people already applied over the weekend, Biden said Monday, estimating that approximately 40 million people stand to gain from the debt relief. Applying “takes less than five minutes,” he noted. The application window runs through Dec. 31, 2023.

Lawsuits challenge debt forgiveness

To be clear, the path to debt forgiveness is not guaranteed for the controversial plan.

Lawsuits, including one from six Republican-leaning states, allege Biden’s loan-forgiveness order is unfair and beyond the president’s statutory power. The case, Nebraska v. Biden, is pending in the Eastern District of Missouri.

Borrowers keenly eyeing their bottom line in a time of hot inflation cannot control the outcome of complex federal litigation. But they can at least steer clear of scammers. If 2022 consumer complaint numbers are any hint, con artists may think they see a money grab.

Through September, there have been nearly 57,000 complaints in general about student loans, according to an FTC spokeswoman. Roughly two-thirds of the complaints relate to debt relief and include scam attempts, she noted. That’s already outpacing the roughly 46,000 student-loan complaints the FTC received last year, and the nearly 38,000 complaints it received the year before that.

Here’s a refresher on what NOT to do:

Do not pay anyone to apply for student-loan forgiveness. It’s a free process, the FTC and Education Department emphasize. is the sole place to apply online and a paper application will be available soon, the agencies note.

The application will ask for a person’s name, birth date, Social Security number, phone number and address. People do not need to upload any documents in their initial bid for the forgiveness. That might come later, but read on for more.

Do not share your Federal Student Aid identification number with anyone. The FSA identification number is the gateway to a person’s student-loan account. For that matter, do not share bank account and credit-card information, Grajales noted.

The Education Department might contact some borrowers seeking more information to verify applications. But that’s only going to come from these email addresses:, or Typos in emails or email addresses are a tip-off that something phishy is going on, Grajales warned.

If the department does reach out via email, it’s going to be related to one of several topics. They may need documentation to verify your income — and that’s where the potential upload of tax documents may come in, the FTC notes.

The education department says it may need information on parents’ income. But that’s only if an applicant was a dependent student any time from July 1, 2021 to June 30, 2022. The department may also need more information about the disbursed loans to determine eligibility.

“If you don’t hear anything from us, no further action is needed,” the Education Department notes. But there will be heads up to applicants once their eligibility is approved and debt relief is applied.

Anyone who thinks they have spotted a student-debt relief fraud attempt can call the FTC at 1-877-382-4357 or go to

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