Nowadays more than 42 milion Americans owe a total of nearly $1.5 trillion in student loan debt. It’s a shocking number. It is understandable that people are looking for help. But not all help is legit and somatimes this “help” can actually make things worse. The FTC alleges the operators of Mission Hills Federal and Federal Direct Group bliked borrowers out of more than $23 million. According to FTC, these companies lured people with falce promises and made them to pay down student loans and lower monthly payments.
The FTC says the companies also lied people about taking over the servicing of the loans so people submitted loan payments directly to them. What is even worse, many of these companies went months or even years, before finding out that 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.
If you or someone you know feels overwhelmed by student loan debt, you should visit StudentAid.gov/repay. If you have private loans, talk with your loan servicer. For more information, check out ftc.gov/StudentLoans.