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Coronavirus Student Loan Scams: How to Spot and Avoid Them

For years, student loan scams have been tempting borrowers with empty or misleading promises that they can have their loans discharged or forgiven. These unscrupulous companies charge fees to enroll borrowers in free Department of Education programs and services including income-driven repayment plans, deferment and forbearance.

Now, amid the coronavirus pandemic, a new crop of student loan scams have emerged. Their tactic is the same, except this time they’re attempting to charge fees for the protections that are already afforded to student loan borrowers under the CARES Act.

Here’s what borrowers should know in order to protect themselves from coronavirus student loan scams.

1. You don’t need to pay for student loan relief amid the coronavirus

Coronavirus student loan protections were added under the CARES Act. The legislation provided the following benefits for most federal student loan borrowers:

  • Suspended payments through September 30, 2020.
  • 0% interest rate through September 30, 2020.
  • Suspended collection efforts on defaulted federal student loans.

These benefits were applied to borrowers’ accounts automatically, for free. So if you encounter a company that tries to charge you for any type of ‘coronavirus student loan relief,’ steer clear.

2. Other free, legitimate programs are available through the Department of Education

Even before the coronavirus pandemic borrowers with federal student loans could (and still can) do all of the following for free through their federal student loan servicer:

Student loan scammers take advantage of borrowers who don’t know these programs exist. If you’re educated on the repayment options available to you, you’ll be less likely to fall into a student loan scam trap.

3. There are warning signs of student loan scams to watch out for

The Consumer Financial Protection Bureau provides a list of red flags that may indicate a company is trying to rip you off—these apply to coronavirus student loan scams, too. The warning signs include:

  • Pressure to pay upfront fees
  • Promises of immediate relief
  • Requests to sign a power of attorney form
  • Requests for access to your Federal Student Aid account

If you encounter a company that you suspect is a student loan scam, report it to the Federal Trade Commission. If you’re unsure if a company is a scam, feel free to reach out to us: or ask your federal student loan servicer.


Teddy Nykiel

Teddy Nykiel is a journalist specializing in student loan repayment and college financing. Her work has been published by outlets including the Associated Press, USA Today, MSN and Reuters.

Teddy is passionate about helping students and families get the biggest return on their college investment by maximizing free financial aid and minimizing student debt. She has written extensively about student loan repayment plans, forgiveness programs, consolidation and refinancing options, and student debt relief scams. She has also covered FAFSA completion and understanding financial aid award letters.

Most recently, Teddy was a staff writer and student loans spokesperson for NerdWallet, a personal finance website with more than 10 million monthly visitors. She has a bachelor’s degree in journalism from the University of Missouri.

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