by Alyssa Andrews
Many of my friends struggle with student loan debt, and worry about how to pay it down. Some look to consultants or companies that offer assistance. Turns out one national company allegedly ran a student loan debt relief scam that failed to deliver and took money for services that students could get for free.
In a positive move, New York State shut down a so-called debt relief company called Interactiv Education LLC. The New York State Department of Financial Services discovered the company participated in misleading and deceptive advertising and more.
In New York alone, Direct Student Aid charged over 400 people upfront fees of $99 to $3,400 according to the Student Protection Unit set up by Governor Andrew Cuomo. The company claimed to offer credit relief services and violated the law by taking up-front fees.
The company advertised and promised to reduce and lower monthly student loan payments and help increase credit scores. But they failed to provide the needed paperwork to get anything done. And they also charged money to help consolidate loans through the Department of Education, which you can do for free.
The New York Department of Financial Services penalized the company $10,000 and got it to agree to stop doing business nationwide.
WHAT YOU NEED TO KNOW
New York reminds student loan borrowers that you, “… do not need to pay to enroll in the many borrower assistance programs that the federal government provides for free.”
You can get loan consolidations, work out income-based repayment plans, and loan forgiveness directly. If you already defaulted, the government provides options like loan rehabilitation.
FIND OUT MORE
You can contact your federal student loan servicer or visit DFS’s online Student Lending Resource Center, the Federal Department of Education or the Consumer Financial Protection Bureau’s interactive student loan repayment guide.
New York State’s complaint names Interactiv Education, LLC, Direct Student Aid, INC., Thomas Panik and David Stein.