According to the Consumer Financial Protection Bureau (CFPB), a student loan debt relief scam has illegally been tricking borrowers into paying for federal loan benefits. Student Aid Institute, Inc., misrepresented to consumers that it was affiliated with the Department of Education.
“We see more and more companies and websites demanding large upfront fees to help student loan borrowers enroll in income-driven plans that are available for free,” said CFPB Director Richard Cordray. “These practices bear a disturbing resemblance to the mortgage crisis where distressed consumers were preyed upon with false promises of relief. We will continue to shut down illegal scams and address sloppy servicing practices that victimize consumers.”
Student Aid Institute has its headquarters in San Diego, California. Its chief executive officer is Steven Lamont and it is a debt relief services company that claims it will reduce a borrower’s student loan payments. However, some of the services it provides, such as plans offered by the Department of Education that provide borrowers with more affordable payments, can be obtained without payment enrollment fees. Student Aid Institute deceived its customers by charging fees. As a result, Student Aid Institute obtained millions of dollars in charging these fees to thousands of struggling borrowers.
The CFPB’s consent order requires Student Aid Institute to:
· Stop all of its debt relief operations.
· Cancel the company’s contracts with borrowers and stop charging any fees.
· Immediately stop offering any debt relief services.
· The company is required to ensure that its customers do not miss any important deadlines for recertification or renewal deadlines. Student Aid Institute is required to prepare and mail all of the documentation needed for the customer to maintain enrollment in the plan.
· Pay a civil penalty.
If you have questions regarding debt relief, we can help. During your free consultation, attorneys Bruce Levitt and Shelley Slafkes will carefully explain all of your options so you can make an informed decision about how to best proceed. Contact us today at 973-323-2953 to schedule a free initial consultation with a compassionate and knowledgeable lawyer.