Student Loans: These Borrowers Will Get $822,000 In Student Loan Relief Due To Scam

These student loan borrowers will get more than $822,000 in student loan relief.

Here’s what you need to know — and what it means for your student loans.

Student Loans

While more than 40 million borrowers are hoping for wide-scale student loan forgiveness, the Federal Trade Commission (FTC) announced today that it would issue student loan relief to victims of a major student loan debt scam.


Student loan relief: the allegations

According to the FTC’s complaint in September 2019 filed in U.S. federal court in California, the FTC alleged that the defendants, Student Advocates and Equitable Acceptance Corporation:

  • charged student loan borrowers illegal, upfront fees up to $1,400;
  • falsely claimed these fees were applied to lower borrowers’ student loans;
  • improperly steered student loan borrowers into high-interest loans to pay these fees;
  • made false promises to student loan borrowers that the defendant’s services would, among other promises, lower student loan payments and eliminate all their student loans; and
  • didn’t apply any money collected from student loan borrowers to reduce the borrowers’ student loan balances.

Student loan relief: the details

Here’s who qualifies and how to collect student loan relief:

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  • Who qualifies: student loan borrowers who were victims of this alleged student loan debt relief scam;
  • How much student loan relief: 14,521 checks for student loan relief totaling more than $822,000;
  • When to cash student loan relief: student loan borrowers should cash their check within 90 days; and
  • Who to contact: Student loan borrowers can contact JND Legal Administration at 877-540-0989.

Student Advocates has been banned from providing student loan 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 says he will announce his decision on wide-scale student loan forgiveness before August 31, 2022. That’s when the student loan payment pause ends. If the president enacts wide-scale student loan cancellation, student loan borrowers should be aware of these next steps. While there are multiple opportunities to get student loan relief, you shouldn’t pay a third-party company to get student loan debt relief. No company can magically erase your student loan balance. Student loan relief, or student loan forgiveness, is available through the federal government with no fees. This includes programs such as public service loan forgiveness and teacher loan forgiveness, for example. State governments and non-profit organizations may offer student loan forgiveness as well, but these programs also have no fees. If you believe a student loan relief company misled you, you can contact the FTC, U.S. Department of Education, your state attorney general or the Consumer Financial Protection Bureau. It’s essential to understand all your options for student loan repayment. Knowing your options can help you to avoid student loan scams. Here are some popular, safe ways to pay off student loans and save money:


Student Loans: Related Reading

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Student loan cancellation: Congress proposes 0% interest rates for student loans

Senators propose major changes to student loan forgiveness

Student loan forgiveness must be extended, attorneys general warn Biden

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