These student borrowers will get over $822,000 in student loan relief.
Here’s what you need to know — and what it means for your student loans.
As more than 40 million borrowers hope for large-scale student loan forgiveness, the Federal Trade Commission (FTC) announced today that it will provide student loan relief to victims of a major student loan scam. students.
Student Loan Relief: The Allegations
According to the complaint filed by the FTC in September 2019 in US federal court in California, the FTC alleged that the defendants, Student Advocates and Equitable Acceptance Corporation:
- charged student loan borrowers an illegal up-front fee of up to $1,400;
- falsely claimed that these fees were applied to reduce borrowers’ student loans;
- improperly channeled student borrowers into high-interest loans to pay these fees;
- made false promises to student borrowers that defendant’s services would, among other promises, reduce student loan repayments and eliminate all of their student loans; and
- did not apply money collected from student borrowers to reduce borrowers’ student loan balances.
Student Loan Relief: The Details
Here’s who is eligible and how to get student loan relief:
- Who is eligible: student borrowers who fell victim to this alleged student debt relief scam;
- How Much Student Loan Relief: 14,521 checks for student loan relief totaling over $822,000;
- When to cash out student loan relief: student borrowers must cash their check within 90 days; and
- Who to contact: Student borrowers can contact the JND Legal Department at 877-540-0989.
Student Advocates was barred from providing student debt relief as part of a settlement with the FTC. Equitable Acceptance Corporation settled its charges in September 2019.
Student Loan Relief: Next Steps
President Joe Biden has said he will announce his decision on large-scale student loan forgiveness by August 31, 2022. That’s when the student loan payment pause will end. If the President enacts large-scale student loan forgiveness, student borrowers should be aware of these next steps. Although there are many opportunities to get student loan relief, you should not pay a third-party company to get student loan debt relief. No company can magically wipe out your student loan balance. Student loan relief, or student loan forgiveness, is available free from the federal government. This includes programs such as civil service loan forgiveness and teacher loan forgiveness, for example. State governments and nonprofit organizations may also offer student loan forgiveness, but these programs are also free. If you think a student loan assistance company misled you, you can contact the FTC, the US Department of Education, your state attorney general, or the Consumer Financial Protection Bureau. It is essential to understand all of your student loan repayment options. Knowing your options can help you avoid student loan scams. Here are some popular and safe ways to pay off student loans and save money: