By guest blogger Jessica Ranucci
New York state officials announced today that a student loan debt relief provider is shutting down operations after an investigation by the state’s Student Protection Unit. The company, Inveractiv Edcuation, advertised that it could lower students’ monthly loan payments and charged borrowers upfront fees of up to $3,400 for its services. The company assisted borrowers by completing applications for federal Direct Consolidation Loans — which are available to all borrowers free of charge.
This announcement comes on the heels of efforts by the Consumer Financial Protection Bureau to shut down scams directed at student borrowers. In the past, the CFPB has partnered with state authorities to take enforcement action against other companies that illegally trick student borrowers into paying high upfront fees for free federal loan benefits.
Recently, the CFPB turned to Google, Bing, and Yahoo for help stopping these scams. The agency monitored advertising data from the search engines and found that struggling borrowers search for debt assistance through keywords such as “student loan default” and “student loan forgiveness.” In letters to the companies sent last week, the CFPB requested that the search engines help to ensure that these keywords return results that exclude illegal scams and link to legitimate sources, such as government websites.
The New York consent decree is here, and the CFPB letter is here.