You are here

FTC shuts down student loan debt relief scheme

Share this page

It’s a staggering number. More than 42 million Americans owe a total of nearly $1.5 trillion in student loan debt. It’s no wonder people look for help. But not all help is legit. Scammers are targeting borrowers with student loan debt relief schemes that can actually make things worse.

In a new case announced today, the FTC alleges the operators of Mission Hills Federal and Federal Direct Group bilked borrowers out of more than $23 million. The FTC says these companies lured people with false promises to pay down student loans and lower monthly payments. According to the FTC, the companies also lied about taking over the servicing of the loans, which tricked people into submitting loan payments directly to them. In fact, the defendants diverted borrower payments to themselves.

What’s more, many of these borrowers went months, sometimes years, before learning their student loans weren’t being repaid. Why? The FTC says the defendants made people give their federal student aid IDs, or other personal information, to enroll in the debt relief program. They used that information to change borrowers’ contact information on U.S. Department of Education websites, which limited the borrowers’ contact with their federal loan servicers.

If you or someone you know feels overwhelmed by student loan debt, know this: There’s nothing a company can do for you that you can’t do yourself for free. If you have federal student loans, start with If you have private loans, talk with your loan servicer. For more information, check out

Here are a few tips to help avoid debt relief scams.

Spotted a scam? Let us know about it at

Tagged with: debt, loan, scam, student
Blog Topics: 
Money & Credit


Bravo FTC!!!!! Bravo!!!!!

Congratulation FTC.

We received two of these calls: July 10 and two weeks prior. We paid off our student loans in full by 1975. Don't know why we are on the call list.

Im using "FedLoan Servicing", I hope they are a legitimate company?

The companies the FTC sued in this case are Mission Hills Federal and Federal Direct Group. You can read more about the case in the press release.

If you have federal student loans, you can use free information from the US Department of Education at to learn about repayment options.

They're not. I mean they could be. But no, I called the Department of Education because they put my student loan back on active while it was under investigation, but the Department of Education said that they did it without the Department of Educations permission and they had been receiving A LOT of calls from people stating that FedLoan Servicing had been renewing peoples payments without authorization the past month.
Also, I have emails with them of them lying and blatantly trying to frame me. I have a conversation about my loan payment and my dispute that they were directing to the wrong sources of which blatantly would make the average person give up on trying to defend unlawful payments, their response almost every time I talked to them was that their contract is to make us pay the loan under any circumstances and that no matter the situation that they are to assure that the loan gets paid by. They have clearly made that obvious with how they have reacted.
I had 2 loans for 1 school, TuitionOptions and FedLoan, I told TuitionOptions about my situation in minor detail because I sent them a message to ask them a legal question about owing the loan/payments, they immediately closed my loan, saying I didn't owe it, but I think TuitionOptions was a Private Loan. FedLoan though misdirected me, lied to me, basically blackmailed me, and like with many others as The Department of Education told me, unlawfully reinstated peoples loans.

I was one of these people that fell for this. 4 years later, the company I went through is under investigation. I recently called my student loan provider and spoke to them about the situation. Although they cannot do anything, I did find out that this company got me for 17,000. Instead of paying my loans down, I now have more debt. Be careful people, I didn't know better at the time.

Sorry, FTC, you missed someone! I got a call July 15, around suppertime, and guess what? I paid off my student loans *years* ago and have records to prove it. Yet this person (a live one) said a name and 1-888 return call number and said there was a 'letter' to delay action for, gee, less than a day more. No written notices, no other calls, nothing on my credit report, and did I mention my loans were paid off years ago?

Louisiana number, mobile phone. Just in case this one slipped the net.

I was told that I charged 42,000 dollars to a credit card.I have never had card with a limit that high!!

Just got a scam robo-call today. First, it was a recording, second, I PAID my student loans off over 30 years ago and third, my son didn't take out any loans.
(856) 777-7192

I have student loans on my credit report,and I have never taken a loan out in my life..what do I do_

July 15th and 17th, and I am still receiving these calls. SAME lady everytime but goes by 2 different names of Diana Nelson and Barbara Harris. Same MO, no name but they want to give me refinance options for my loan. Caller ID and call back numbers are always different. Today's call from 435-465-9453 with a call back number of 866-855-3443. Other numbers noted are 866-855-3443, 866-262-6116, 866-456-9828, 866-472-9458. Yes, I will also file an online complaint.

I have received at least 6 calls from this person . Just had another
one 5 minutes ago.

Do you know anything about Regional Accounting Center they just had my sister in law sing all kind of forms and setup a payment plan for 240 months. Totaling 6k+ for 30k of loans.

Been plagued by these calls for way too long! TYTYTYTYTYTYTY!!!!!

This is the scam call I received today. I almost fell for it because I am enrolled in a Loan Forgiveness program. I called back and “Tiffany “ answered the phone with the company name “Mentor Servicing”. I’ve looked the number up on here and found identical calls other people have received, even with the same reference number. BEWARE!
Here is the voicemail transcription,
“ Hello this is Becky with the student loan servicing approval department I'm contacting you today regarding your federal student loans eligibility for the forgiveness program it is important that we speak to you at your earliest convenience you can reach us at 855-512-3778 again that's 855-512-3778 please be sure to mention reference number 01455 thank you…”

Just got this call July 23, 2019. Last one was back in February. Same 'Virginia Davis, reference # 060008' both times. Guess the FTC missed some.

Received a call from Virginia Davis saying options have changed for repaying Federal Student Loans. Left a number to call her back 866-789-1441 Ref# 060008. Asks for nonespecifically & never says where she's calling from.

Received a call/voicemail TODAY.

Received a call/voicemail TODAY from 866-789-1441 Virginia Davis. Ref #060008. I've never had any student loans.

Another company or the same company is at it again.
Received call from Virginia Davis (866) 789-1441 asking me to return her call using Reference #060008.
Stated she wanted to go over recent changes to my Federal Student Loan

Leave a Comment