FTC Sending to Millions to Students Who Lost Money in Student Loan Debt Relief Scam

If you are one of the thousands of graduates looking for help with student loan debt relief, you should know the Federal Trade Commission is sending more than $5.4 million to nearly 40,000 people who lost money to a student loan debt relief scam.

The defendants behind the scam were required to turn over money under a 2018 settlement with the FTC.

The defendants’ Los Angeles-based companies used a number of names, including: Grads Aid; Post Grad Services; United Legal Center, Academic Aid Center; Academic Protection; Academy Doc Prep; and Academic Discharge and a host of others.

The FTC alleged that the defendants’ companies bilked millions from people trying to lower or eliminate their student loan debt.

The defendants marketed on social media platforms, including Facebook.

According to the FTC’s complaint, they misrepresented that they were affiliated with the U.S. Department of Education or the loan servicers when in fact, they had no such connection with them.

The companies also falsely claimed that consumers who paid an upfront fee of up to $1,000 were qualified or approved for permanently reduced monthly payments or loan forgiveness, but the FTC says the defendants had no affiliation with the U.S. Department of Education and operated a service that provided no relief.

As part of the settlement, the FTC is sending 39,734 checks, averaging $136.48, to people who lost money.

The checks will expire after 60 days, as indicated on the check. The FTC urges people to cash them before they expire.

Consumers who wish to avoid falling victim to such frauds can visit ftc.gov/StudentLoans to learn more.

Consumers also can apply for loan deferments, forbearance, repayment, and forgiveness or discharge programs directly through the U.S. Department of Education, or their loan servicers, at no cost.

For federal student loan repayment options, consumers can visit StudentAid.gov/repay.

Consumers who have questions about the refunds should contact the refund administrator, Analytics, at 1-877-270-9672. To learn more about the FTC’s refund programs, visit www.ftc.gov/refunds.