The U.S. Consumer Financial Protection Bureau, along with the Florida’s Attorney General, has shut down a student “debt relief” provider College Education Services, and separately filed a lawsuit against Student Loan Processing for illegal marketing, agency officials said.
The Bureau has also issued a consumer advisory that warns student loan borrowers to be wary of paying high fees for free federal loan benefits.
“Student loans are already a significant debt for many Americans. College Education Services and Student Loan Processing.US added to that hardship by taking advantage of troubled borrowers and failing to describe their services honestly,” said CFPB Director Richard Cordray. “When scam artists prey on student loan borrowers, we will take action to halt their illegal activity.”
The U.S. Department of Education offers numerous plans to borrowers with federal student loans to make payments more affordable. These include options that let borrowers set their monthly payment based on their income.
“Monthly payments under these plans can be as low as zero dollars per month for unemployed or very low-wage borrowers,” the CFPB said. The Department of Education does not charge any fees to apply for or enroll in these plans, for which many student loan borrowers qualify.
College Education Services, its owner, Marcia Elena Vargas, and advisor and employee, Frank Liz, marketed and advertised debt relief services to student loan borrowers with loans in default. Based in Tampa, Florida, the company advertised through Internet ads and operated websites including CollegeDefaultedStudentLoan.com and HelpStudentLoanDefault.com. The company reaped millions of dollars in advance fees from thousands of consumers before it ceased operations around February 2013.
Student Loan Processing. US, a fictitious business name of Irvine Web Works, Inc., is headquartered in Laguna Nigel, California, with an office in Dallas, Texas. The CFPB alleges that since at least July 2011, the company and its owner, James Krause, has been marketing and advertising services to advise and assist borrowers applying for Department of Education federal student loan repayment programs. The company operates websites under the names StudentLoanProcessing.us, StudentLoanProcessing.org, and slpus.org