FTC shuts down student loan debt relief scheme
More than 42 million Americans are in student loan debt! It’s no wonder people look for help…
It’s a staggering number. 42 million Americans owe a total of nearly $1.5 trillion in student loan debt. But not all help is legit. Scammers are targeting borrowers with student loan debt relief schemes that can actually make things worse.
What are the particulars of this case?
FTC alleges the operators of Mission Hills Federal and Federal Direct Group bilked borrowers out of more than $23 million.
• The FTC says these companies lured people with false promises to pay down student loans and lower monthly payments.
• According to the FTC, the companies also lied about taking over the servicing of the loans, which tricked people into submitting loan payments directly to them.
• In fact, the defendants diverted borrower payments to themselves.
Did the victims have any idea what was happening?
Many of these borrowers went months, sometimes years, before learning their student loans weren’t being repaid.
• The FTC says the defendants made people give their federal student aid IDs, or other personal information, to enroll in the debt relief program.
• They used that information to change borrowers’ contact information on U.S. Department of Education websites, which limited the borrowers’ contact with their federal loan servicers.
What can be done if you are overwhelmed with student loan debt?
Know this: There’s nothing a company can do for you that you can’t do yourself for free.
• If you have federal student loans, start with StudentAid.gov/repay.
• If you have private loans, talk with your loan servicer. For more information, check out ftc.gov/StudentLoans.
• REMEMBER to search the company Complaint record on-line for the BBB Business Profile just use the word complaint with the business name
• NEVER PAY IN ADVANCE for any kind of DEBT RELIEF-that charge is illegal IN ADVANCE of services!