The call sounds official. The rep knows your loan balance, your servicer's name, and exactly how much those student loans are dragging down your credit score. They say they're calling from the Department of Education — or sometimes from your actual servicer — and you've been pre-approved for a forgiveness program that will wipe the balance and clean up your report. All you owe is a monthly processing fee. For thousands of borrowers, that fee ran as high as $1,400 a month, and it bought them nothing.
What Is the Student Loan Forgiveness Scam?
This is a student loan forgiveness scam that works by impersonating the federal government. Two connected companies, NERD Solutions Inc. (marketing as "New Education Relief") and ED REF Inc. (operating as "Edvantage Relief"), ran the scheme from at least February 2022 through April 2026, according to an FTC complaint. Operators Natalie Rodriguez and Pablo Eduardo Ortiz allegedly cold-called borrowers nationwide — including thousands of people on the National Do Not Call Registry — and told them they were affiliated with the U.S. Department of Education or their real loan servicer, with a forgiveness program already lined up.
The FTC says the operation collected at least $8.8 million in advance fees before the U.S. District Court for the Central District of California entered a temporary restraining order and asset freeze on April 13, 2026, along with a temporary receiver to secure what was left.
Do the math a borrower charged $1,400 a month never got to do: over even six months, that's $8,400 paid to a company with no authority to touch a federal loan, for a forgiveness that was never filed.
Why It Sounds Appealing
Student loan debt is uniquely stubborn on a credit report. A default can sit there for years, blocking apartment applications, auto loans, and mortgages. Real relief exists — Public Service Loan Forgiveness, income-driven repayment forgiveness — but both are slow, paperwork-heavy, and run by a system borrowers already feel let down by.
So when someone calls sounding authoritative, using your real balance and your real servicer's name, and offers to make the whole thing disappear, it lands on people who have been waiting years for exactly this. The scam doesn't invent a desire. It borrows a legitimate one — get the debt gone, get the credit report clean — and charges rent on it.
Why It Fails — and Why the Exposure Is Criminal, Not Just Civil
The Department of Education does not cold-call borrowers, and it does not charge for forgiveness. Every legitimate program is free through StudentAid.gov. A company charging monthly fees to "process" your forgiveness is a red flag by itself.
The FTC's complaint charges the operation under four federal laws. The FTC Act (15 U.S.C. § 45) bars unfair or deceptive practices. The Telemarketing Sales Rule (16 C.F.R. Part 310) prohibits collecting advance fees for debt relief before the relief is delivered — the $1,400 monthly charge, collected up front, is the violation on its own. The Impersonation Rule (16 C.F.R. Part 461, effective April 2024) makes it illegal to impersonate a government agency or its officials to deceive consumers. And the Gramm-Leach-Bliley Act restricts how a caller can collect and use the financial data borrowers handed over on those calls.
That's the civil exposure. Individuals who personally directed a scheme to impersonate a federal department also risk 18 U.S.C. § 912, criminal impersonation of a federal officer or agency, punishable by up to three years in prison — and wire fraud under 18 U.S.C. § 1343, up to 20 years per count, for money moved electronically under false pretenses.
For the borrower, nothing changed. The loan servicer never received a forgiveness instruction. The credit report looks the same. Some borrowers stopped paying their actual servicer because they believed the debt was "being handled," which means new missed-payment marks on top of the old ones.
The Real Alternative
None of the legitimate options here cost $1,400 a month.
Dispute genuine errors for free. If a servicer reported a wrong balance, wrong dates, or an incorrect status, you can dispute for investigation under FCRA § 611(a) (15 U.S.C. § 1681i(a)). Bureaus generally must investigate within 30 days. Results vary depending on what the servicer verifies.
Apply for real forgiveness directly, at no cost. PSLF, Teacher Loan Forgiveness, and IDR forgiveness are administered through StudentAid.gov. A third party charging to "apply on your behalf" is selling access to a process that's already free.
Rehabilitate a defaulted federal loan. Nine on-time payments over ten months removes the default notation — often the most damaging mark on the file — through your servicer directly, no fee required.
Enroll in income-driven repayment. A $0 IDR payment, based on income, still counts as on-time and keeps the loan in good standing.
If someone calls promising to erase your student loans and clean up your credit for a monthly fee, hang up and go to StudentAid.gov yourself. Report the call to the FTC at ReportFraud.ftc.gov and the CFPB at consumerfinance.gov/complaint — both feed the pipeline that produced the case above.
Want to dispute it yourself? The CreditShield Toolkit turns your own facts into accurate, statute-cited dispute letters — 11 letter types, one-time $27, no subscription. You print and mail everything yourself. Prefer to learn first? Join the free CreditShield Academy → Educational, not legal advice. Results may vary.
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