Federal Agency Takes Action on Student ‘Debt Relief’ Scams
Today, the Consumer Financial Protection Bureau (CFPB) took action against two student loan “debt relief” companies. From the CFPB:
“The Consumer Financial Protection Bureau (CFPB) took action to put an end to two student ‘debt relief’ scams that illegally tricked borrowers into paying upfront fees for federal loan benefits. The CFPB, in a joint filing with Florida’s Attorney General, shut down student debt relief company College Education Services and separately filed a lawsuit against Student Loan Processing.US for illegally marketing student debt relief services. The Bureau is issuing a consumer advisory today warning student loan borrowers to be wary of paying high fees for free federal loan benefits.”
Our campaign manager, Maggie Thompson, released the following statement in response:
“We applaud the Consumer Financial Protection Bureau’s efforts to shut down these illegal debt relief companies, which are scams that take advantage of struggling student loan borrowers.
“The existence of these companies underscores the need for reform of the student loan servicing system. Servicers should make it easier for student loan borrowers to lower their monthly payments and enroll in programs like income-based repayment or public service loan forgiveness. The failure of student loan servicers to effectively communicate with borrowers has allowed these companies to flourish. In addition to CFPB’s action, the Department of Education must do more to improve student loan servicing.”
The action is an incredible step in protecting borrowers from the scams that crop up in the desperation surrounding student debt.
Read the full CFPB press release. And check out statements from other partners in the Higher Ed, Not Debt campaign!