The Federal Trade Commission announced it will be sending 14,521 checks to borrowers who lost money in a student loan debt-relief scheme.
The FTC said that $822,000 will be sent to those who lost money to Student Advocates. The FTC alleged Student Advocates “charged illegal upfront fees that they falsely claimed went toward consumers’ student loans.”
The FTC said borrowers were directed to use high-interest loans to pay these fees. The FTC added that Student Advocates misled consumers that payments would reduce or eliminate student loan payments.
“None of the money collected by the defendants was paid toward consumers’ student loans,” the FTC claimed.
In May 2021, the government barred Student Advocates from providing debt relief services.