The US Federal Trade Commission (FTC) is sending a total of $5.4 million in compensation to nearly 40,000 people affected by the student loan debt relief scam.
People who send fees to EZ Doc Preps for student loan relief services discovered that the company is a scam, as it claimed to be affiliated with the Department of Education. Authorities were able to investigate the turn of events, saying that this new scheme is a scam.
The FTC said that the EZ Doc Preps makes people believe that they could be eligible for reduced monthly payments or loan forgiveness if they will pay $1,000 upfront. Because of this, the government agency sends out checks as part of the settlement in 2018.
False Advertising On Social Media
According to the authorities, the scam attracted more people as it created marketing stints on social media, saying it could help students with debt relief from student loans. The number of people reached 40,000 and FTC started to handle the situation by conducting a series of investigations.
To completely stop the false information circulating online, FTC stresses that the Department of Education’s programs for student debt relief does not require students the use of a third-party company or any application fees.
Instead of reaching for third-parties, students can actually access federal student loan programs and payment options at the student aid website.
The average amount of people who will receive checks is $136.48 each. The checks will expire if not cashed within 60 days.
Meanwhile, Democrat Rep. Ilhan Omar urged to cancel all $1.6 trillion public and private student debt, and pay for it with taxes on Wall Street transactions.
“As someone who’s part of the debt generation, I wanted to make sure that we were creating a proposal that would alleviate the kind of stress that people are dealing with,” said Omar.