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The Federal Trade Commission announced this week that it would send thousands of checks totaling more than $822,000 to student loan borrowers who lost money in a debt-relief scam.
More than 14,500 consumers who paid money to a company that operated under the name Student Advocates will get a check, which they should cash within 90 days of receipt, according to the FTC.
The FTC brought a complaint against Student Advocates in September 2019, alleging that the company charged illegal upfront fees and lied to borrowers, saying their money would go toward their loans. Customers were also steered into high-interest loans and falsely promised lower payments, and in some cases, debt elimination.
“None of the money collected by the defendants was paid toward consumers’ student loans,” the FTC said in a statement Thursday.
Officials at Student Advocates did not respond to a request for comment made by CNBC via LinkedIn.
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There are more than 44 million student loan borrowers in the U.S., and the country’s total outstanding loan balance is more than $1.7 trillion. The average student loan balance is around $30,000, up from $10,000 in the early 1990s, with many borrowers owing $100,000 or more. Repayment troubles are…
