Press Release  AG Healey Secures Court Judgment Against Fraudulent Student Loan “Debt Relief” Company

Boston — A student loan “debt relief” company has been ordered to pay more than $146,000 as a result of a court judgment against its unlawful and predatory business practices, Attorney General Maura Healey announced today. 

The judgment was entered in Suffolk Superior Court, against Student Loan Relief, Inc. and Student Loan Relief of Texas, Incorporated (collectively, “SLR”) for engaging in unfair and deceptive business practices, specifically these companies charged unlawful upfront and ongoing fees and misled customers about who they were and the services they could provide.

“These businesses market themselves as student loan ‘debt relief’ companies when, in reality, they exploit vulnerable borrowers looking for help,” said AG Healey. “We have shut down these illegal operations in Massachusetts and secured refunds for students. These deceptive practices are not welcome in our state.”

The judgment against SLR includes restitution for affected student borrowers and $130,000 in civil penalties. The judgment also prohibits SLR from doing business in Massachusetts without meeting the requirements of the state’s credit services organization statute, including the need to provide disclosures and post bond under various circumstances.

The AG’s complaint against SLR alleged that these companies made a variety of false and unlawful statements to student loan borrowers. These included: telling student loan borrowers they were connected to, or a part of, the federal government; promising to dramatically lower or eliminate customers’ monthly student loan payments or, in some instances, telling customers their federal student loans would be forgiven entirely; submitting false information to the federal government on behalf of customers and without their knowledge; charging upfront fees to customers in violation of state laws governing credit services organizations; and continuing to charge monthly fees long after customers had canceled their agreements.

Today’s announcement is the sixth in a series of lawsuits or enforcement actions brought against student loan “debt relief” companies by the AG’s Office. AG Healey previously reached settlements with U.S. Direct Student Loan Services, Student Loan Service.US, Student Loan Processing.US, Direct Student Aid, and United Advisors Group, LLC. 

Student loan “debt relief” companies often advertise on the internet and market student loan “forgiveness.” They typically induce borrowers to pay hundreds of dollars in unnecessary fees to get federal student loans out of default, apply for federal consolidation loans, or enroll in income-driven repayment plans. Additionally, many of these companies falsely imply they are affiliated with the federal government or can provide special access to repayment, refinance, or loan forgiveness programs.

Federal student loan borrowers do not need to pay private companies to resolve defaulted loans, enroll in more affordable repayment plans, submit a federal loan consolidation application, or apply for discharges and loan forgiveness. The U.S. Department of Education offers these programs and opportunities directly to borrowers at studentloans.gov and there is never a fee to apply. Massachusetts residents who have had problems with student loan “debt relief” companies are urged to file a complaint with the Attorney General’s Office at www.mass.gov/ago/studentloans.  

Massachusetts students who want to learn more about their student loan options, or who want help 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 assistance.

This lawsuit was handled by Assistant Attorney General M. Claire Masinton and Legal Analyst Amanda Hesse, of the AG’s Insurance & Financial Services Division.

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