As FORBES reports in its August 17th issue, the peddlers who once preyed on underwater mortgage holders are now going after a new set of victims: those sinking under student loans. If you’re one such borrower, don’t be fooled by these firms’ promises of loan forgiveness and low-low-low monthly loan payments in return for high upfront fees – you can do all of this on your own for free at studentloans.gov.
Want to know which sites to avoid? Here’s a look at the ten student debt relief outfits being sued by state and federal agencies:
Student Aid Center, Inc. | Doral, FL.
On web as studentaidcenter.net, studentloanforgivenessplans.org
In a July 2015 suit, the Minnesota Attorney General alleged Student Aid Center collects illegal upfront fees and misleads students, while promoting itself on Instagram, among other social sites. "We’re definitely not a scam, that’s for sure," responds Student Aid co-president Damien Alvarez, who describes it as a legitimate document processing firm with a money back guarantee.
Student Consulting Group, Inc. | Atlanta, GA.
On web as fixmystudentloan.com
In a May 2015 suit, the Illinois AG alleged the company violated state fraud and debt settlement laws by charging as much as $1,200 upfront to file free federal applications, and advertising it can reduce student loan payments, when only the Department of Education can. Until early 2014, the suit says, the company used logos of ABC,
Consumer Financial Resources, LLC. | Wylie, TX
On web as Studentloanresolve.com
In a May 2015 suit, the Illinois AG alleged that Consumer Financial Resources violated state fraud and debt settlement laws by falsely implying it can “remove defaults, stop tax offsets and prevent wage garnishments” and that it has special loan forgiveness programs. It also advertises on Facebook. The company hasn’t yet filed a court response and didn’t respond to FORBES’ request for comment.
Interactiv Education, LLC | Delray Beach, FL
On web as DirectStudentAid.com (now out of service)
In a May 2015 suit, the Illinois AG alleged it violated state fraud and debt settlement laws. It advertised on
Getting into college is hard enough. Paying for it shouldn’t be. Find out how to save thousands on higher ed.
Nationwide Student Aid, LLC. | Chicago, IL
On web as NationwideStudentAid.com (now out of service)
In a May 2015 suit, Illinois AG Lisa Madigan alleged Nationwide violated state fraud and debt settlement laws, charging upfront fees of up to $1,250 and advertising on the web, TV, radio and on Facebook that it can “Get Student Loans Out of Default” and “Stop Wage Garnishment,’’ when all it does is complete applications for federal loan consolidation and repayment. Nationwide hasn’t yet filed a court response and attempts to reach it were unsuccessful.
Federal Student Loan Alliance, LLC. | Tustin, CA
On web as federalstudentloanalliance.com (now out of service)
In a May 2015 suit, the Illinois AG alleged it violated state fraud and debt settlement laws by misleading student debtors about what it can do while collecting as much as $795 from them. FSLA has not yet filed a court response, and FORBES' attempts to reach the company were unsuccessful.
Irvine WebWorks, Inc. | Dallas, TX
On web as StudentLoanProcessing.us and StudentLoanProcessing.org
A suit filed by the Consumer Financial Protection Bureau last December and another filed by the Washington State AG in April allege it violated federal and state consumer protection and credit repair laws by charging upfront fees and misrepresenting its relationship with the Department of Education. The company denies charges, with WebWorks founder James Krause telling FORBES, “We’re looking forward to our week in court.” Sure students could apply for loan relief themselves, Krause says, but people pay for lots of services they could do themselves, like mowing their lawn or changing their car's oil.
College Education Services, LLC | Tampa, FL
On web as CollegeDefaultedStudentLoan.com, HelpStudentLoanDefault.com (now out of service)
A suit filed jointly by the CFPB and the Florida Attorney General last December alleged CES violated the federal telemarketing fraud law. Without admitting or denying the allegations, CES agreed to cease operations and pay a $25,000 penalty to the CFPB and $25,000 in costs and penalties to Florida.
Broadsword Student Advantage, LLC. | Carrollton, TX
On web as getforgiven.org
A suit filed by the Illinois AG in July 2014 alleged Broadsword violated the state’s fraud and debt settlement laws by charging a $499.99 up front fee and using a sister registered investment advisor firm, Affordable Life Plans, to collect a $49.99 monthly fee after that. In court papers, Broadsword says it is legally soliciting business for Affordable, which isn’t subject to the debt settlement law.
First American Tax Defense, LLC | Chicago IL
On web firstamtax.com (now out of service)
A suit filed by the Illinois AG in July 2014 alleged First American violated the state’s consumer fraud and debt settlement laws by charging upfront fees of as much as $1199 for services that are free through the Department of Education and falsely suggesting it is affiliated with the Department of Education. While the web site displayed logos of ESPN, Fox, The History Channel, and Dish Network with the phrase “as seen on TV,’’ none had reported on or endorsed portraying the firm, the suit says. First American Tax has not filed a response with the court and FORBES' attempts to reach the company were unsuccessful, though a spokesperson for the Attorney General’s office said that a consent decree is forthcoming.
