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Student Loan Forgiveness Scams: Red Flags to Watch Out For

It's important to be aware of student loan forgiveness scams!

On August 24, President Biden announced a three-part plan to help middle- and working-class people with student loan debt. The part that most people have focused on is up to $20,000 of student loan forgiveness. Everyone wants to know what they have to do to get their loans forgiven.

Since the initiative is so new, there isn’t a lot of concrete information yet. And scammers have jumped on the opportunity. This article explains what we know so far about student loan forgiveness – and how to spot student loan forgiveness scams.

The Facts About Student Loan Forgiveness

There are a few details available. Here’s what we know right now.

Who is Eligible for Student Loan Forgiveness?

This student loan forgiveness initiative is designed to help low- and middle-income borrowers. There is an income limit to be eligible. For people who file taxes as either Single or Married Filing Separately, the income limit is $125,000. If you file taxes as Head of Household or Married Filing Jointly, the limit is doubled to $250,000. This number is based off your adjusted gross income. If you’re unsure if you qualify, you can check your adjusted gross income on your most recent tax return. If someone claims you as a dependent on their taxes, though, it’s their income that counts towards this limit, not yours.

Your educational status doesn’t matter. You can be a current or former student. There are no restrictions on types of degrees, field of study, or academic performance. You don’t even have to have graduated.

Which Loans Can Be Forgiven?

Almost all federal student loans are eligible. This includes direct loans for both undergraduate and graduate education, Parent PLUS loans, consolidation loans, Perkins Loans, and even defaulted loans. This student loan forgiveness is only applicable for federal student loans held by the U.S. Department of Education. If you have private student loans, they will not be forgiven through this program.

This forgiveness only applies to loans taken out before June 30, 2022. If you have more recent federal loans, they are not eligible.

How Much Student Loan Forgiveness Is Available?

Everyone who meets the income eligibility requirements can have up to $10,000 in federal student loans forgiven. If you have received a Federal Pell Grant at any point, you are eligible to have up to $20,000 in student loan debt forgiven.

The amount of forgiveness you receive can’t be greater than the amount you owe. If you meet the requirements to have $10,000 forgiven but only have $6,000 in federal student loans, the government will not write you a $4,000 check. You will only receive $6,000 in student loan forgiveness.

How to Apply for Student Loan Forgiveness

In early October, will have an online application that you will need to fill out to apply for student loan forgiveness. This application is not available yet. As long as your contact information is up to date, will send you an email when it is available. You can also sign up for notifications directly on the Department of Education’s website.

If the Department of Education already has your income data – for example, if you filed a FAFSA for 2021 or are on an income-based repayment plan – you won’t have to fill out this application. They will send you an email and automatically adjust your account balance. However, they encourage everyone to fill out the application anyway.

If you are filling out the application, you will need to submit it by December 31, 2023. Once you submit it, you will see the change reflected in your account balance in 4 to 6 weeks. The sooner you fill out the application, the sooner your application will be processed.

According to, you should take these steps right now:

  1. Log into your and make sure your contact information is up to date. If you don’t have a account, create one.
  2. Make sure your contact information is up to date with your loan servicer. (If you don’t know who your servicer is, you can find it in your account.)

Warning Signs of Student Loan Forgiveness Scams

When so much money is involved, scammers want to get in on the action. Since there is so much uncertainty about how student loan forgiveness works, they have lots of opportunity to tell you lies and trick you into giving them your money or your information. Beware of these signs that you’ve encountered a scam.

Offering A Check

This student loan forgiveness will be applied directly to your balance. You will not receive a check, money transfer, or deposit to your bank account. Anyone claiming to send your student loan forgiveness money directly to you is trying to scam you.

False Urgency

This is not an urgent situation. Applications will be accepted until the end of 2023. The application won’t even be available until October. Any text, email, or call claiming you need to “act now” to get your student loans forgiven is a scam.

Tax Scams

The amount of loan forgiveness is not considered taxable income for federal taxes. However, some states may consider it taxable income for state taxes. This will be something you will manage when you file your tax returns. If the IRS calls, texts, or emails you claiming you have to pay taxes on your student loan forgiveness right now, it’s a scam.

Fake Applications

The application will be available online starting in early October. You can find it on, the Department of Education’s website, or both – it’s unclear right now. If you receive a call, text, or email asking for your information so you can receive student loan forgiveness, it’s a phishing scam. Also be aware of links to fake websites. Any online application you receive before October is trying to steal your information. And any online application that’s not on or is definitely fake. If in doubt, visit or directly.

The Bottom Line

Right now, student loan forgiveness has been announced but hasn’t gone into effect. You can’t submit an application until October. Anyone telling you to take action immediately is running a student loan forgiveness scam. Look at and for trustworthy information. Once the application opens in October, be careful to only fill out the real application. Visit or directly to make sure you’re not giving a scammer your information. The Department of Education will never ask for your information over the phone, via text, or in an email in order to forgive your student loans.

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