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Press Release  AG Healey Prohibits Unlawful Student Loan ‘Debt Relief’ Company From Doing Business in Massachusetts

Company to Provide Refunds to Borrowers; Settlement is Fourth Legal Action by AG Healey Against So-Called Student Loan “Debt Relief” Businesses
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  • Office of Attorney General Maura Healey

Media Contact   for AG Healey Prohibits Unlawful Student Loan ‘Debt Relief’ Company From Doing Business in Massachusetts

Jillian Fennimore

BOSTON — Attorney General Maura Healey has taken action against another student loan “debt relief” company that allegedly charged illegal fees to borrowers in Massachusetts. This case is the fourth in a series of enforcement actions brought against these companies by the AG’s Office.

Under the terms of the settlement, filed yesterday in Suffolk Superior Court, DFL International – which is based in Florida and did business as US Direct Student Loan Services – will refund 18 affected student loan borrowers and cease doing business in Massachusetts. 

“In the middle of this student loan debt crisis, a host of fly-by-night ‘debt relief’ companies have cropped up to exploit struggling borrowers,” AG Healey said. “These companies falsely imply that they work for the federal government or that fees are required to enroll in a more affordable repayment plan or get out of default. We want to make sure that federal student loan borrowers realize that they can apply for income-driven repayment plans and get out of default on their own for free. We also hope these cases serve as a warning to this industry that it can no longer take advantage of student loan borrowers in Massachusetts.”

AG Healey alleges that DFL charged borrowers upfront fees that were illegal under state law. By operating under the name US Direct Student Loan Services, the company also conveyed a false association with the U.S. Department of Education and its main loan program, known as the “Direct” loan program.

Under the terms of the agreement, DFL will provide a total of $6,500 to 18 affected borrowers, which brings the total recovery by the AG’s Office for those affected by these companies to more than $260,000. DFL has also agreed to stop providing student loan services to Massachusetts residents, and is prohibited from selling or disseminating any customer information it may have collected. 

Student loan “debt relief” companies like DFL do not hold any type of licensure. They often target borrowers directly or advertise student loan “forgiveness” or “debt relief” on the internet or radio. They typically charge borrowers hundreds of dollars for their services, and often choose names that imply a relationship to the U.S. Department of Education, its “Direct Loan” program, or the federal government.

At best, the services provided involve accessing borrowers’ online accounts with the U.S. Department of Education and transferring information provided by borrowers onto U.S. Department of Education forms. At worst, no services are provided or the steps taken are harmful to the borrower and result in interest capitalization or default. Borrowers who provide their confidential personal information to “debt relief” companies may also be at risk of identity theft.

In addition to taking actions against these companies, AG Healey is reminding federal student borrowers that they do not need to pay private companies to resolve defaulted loansenroll in more affordable repayment planssubmit a federal loan consolidation application, or apply for discharges and loan forgiveness. The U.S. Department of Education offers these programs and opportunities directly and there is no fee to apply.

Massachusetts borrowers who have been victimized by a student loan “debt relief” company are encouraged to report their experience to the Attorney General’s Office by filing a Student Loan Request for Assistance

This case against DFL is the fourth in a series of enforcement actions brought by Attorney General Healey against student “debt relief” companies. In September 2016, AG Healey announced a settlement with a company that did business as “Student Loan Service.US” that required it to refund $160,000 to more than 400 customers and reform its business practices. In November 2015, AG Healey announced settlements worth $96,000 with two additional companies – Student Loan Processing.US and Direct Student Aid – for their allegedly unfair and deceptive practices.

Massachusetts students who encounter difficulties enrolling in federal income-driven repayment programs or resolving defaulted loans may contact the Attorney General’s Student Loan Assistance Unit at 1-888-830-6277 or visit www.mass.gov/ago/studentloans for free help. Students who are interested in learning more about income-driven repayment plans, have questions about their student loan options, or would like to know if they are eligible for relief under this settlement can also call the AG’s Student Loan Assistance Unit. 

The settlement with DFL International was handled by Assistant Attorney General Brook Kellerman of the Attorney General’s Insurance & Financial Services Division.


Media Contact   for AG Healey Prohibits Unlawful Student Loan ‘Debt Relief’ Company From Doing Business in Massachusetts

  • Office of the Attorney General 

    Attorney General Maura Healey is the chief lawyer and law enforcement officer of the Commonwealth of Massachusetts.
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