NYDFS Shuts Down Student Loan Debt Relief Provider

On July 1, 2015, Governor Cuomo announced a student loan debt relief provider was ceasing operations following an investigation by the Student Protection Unit of the Department of Financial Services.

The company allegedly engaged in misleading and deceptive advertising as well as other improper practices.  The company claimed it could “reduce” and “lower” monthly loan payments, but instead the company would allegedly simply fill out applications already available for free for consumers from the U.S. Department of Education.  The federal government offers several borrower assistance programs for free.  The company did not disclose to consumers they could fill out these forms for free online.  For these services, the company charged more than 400 New Yorkers fees ranging from $99 to $3,400.

The company also offered services to improve credit scores, requesting illegal fees for their services.  The company failed to provide notices and disclosures under the federal laws.

The company agreed to cease operations, and pay a $10,000 fee to the Department of Financial Services.