College Education Services, Marcia Elena Vargas, Frank Liz
Enforcement, Student Loans
The CFPB sued College Education Services and Student Loan Processing, alleging they were “running ‘scams’ that promised relief for struggling student loan borrowers,” but instead “illegally charged high upfront fees for their services while deceiving borrowers.” The CFPB ordered College Education Services to pay a $25,000 civil penalty due to the inability for them to “pay a more substantial amount,” and ordered Student Loan Processing to pay refunds to affected consumers and a civil penalty.
“The CFPB claims that the now-defunct College Education Services in Tampa ‘reaped millions of dollars’ in upfront fees by advertising to defaulted student loan borrowers through its own websites and online ads. … Among the charges, officials said College Education Services falsely guaranteed to reduce a loan’s monthly payments by up to 50% and to secure a new federally backed consolidated loan within a short time frame.”
“In a separate suit, the agency claimed that Student Loan Processing.US and its owner, James Krause, falsely led consumers to believe the company was affiliated with the Department of Education and then charged upfront fees for federal loan repayment services. The company also allegedly charged a monthly fee on repayment plans that some students would have qualified for free. The alleged activities date back to at least July 2011.”
The CFPB ordered College Education Services to pay a $25,000 civil penalty due to the inability for them to “pay a more substantial amount.” [Rachel Witkowski, “Debt Relief Firms Tricked Students into High Fees, CFPB says,” American Banker, 12/12/14]
Inactive or Resolved