AG Takes Action Against 'Student Debt Relief' Company

MASSACHUSETTS—A company that allegedly charged hundreds of Massachusetts borrowers unlawful upfront fees and misled them about its affiliation with the federal government will refund those customers, Attorney General Maura Healey said.

Under the terms of a settlement, Libre Technology, Inc. – which did business under the name Student Loan Service.US – will refund $160,000 to more than 400 Massachusetts customers and reform its business practices.

“Student loan debt is crushing students, their families and our communities, and many companies have taken advantage of this crisis by misleading borrowers looking for help,” AG Healey said in a statement. “My office will continue to protect students from these abuses and ensure that they utilize the free federal programs available to manage their monthly payments. We are pleased to get money back for those who were charged illegal upfront fees for loan assistance.”

Also under the agreement terms, Libre will change its name and website to avoid further confusion for consumers and misrepresentation of any affiliation with the federal government. Libre’s services will be discontinued for all Massachusetts consumers, unless the consumer completes an opt-in notice provided under the settlement. Additionally, previously incurred unpaid fees will be waived for all current Massachusetts customers, said the attorney general.

Libre has also agreed to disclose in its contracts and marketing materials that it has no affiliation with the federal government, that federal student loan borrowers can apply for income-driven repayment plans or consolidation on their own for free at www.studentloans.gov, and that Libre cannot help borrowers get lower monthly payments than they can get by applying on their own, said the announcement.

AG Healey explained in the announcement that student loan “debt relief” companies such as Libre typically charge student loan borrowers hundreds of dollars to help them arrange lower monthly payments or resolve defaulted federal student loans. Often, these companies advertise “student loan debt relief” or “Obama student loan forgiveness” on the internet or radio, and fail to disclose that borrowers can apply for this federal loan assistance on their own and for free. The companies typically use names that are intended to falsely convey an association with the federal government or U.S. Department of Education.

Federal student borrowers do not need to pay private companies to access borrower assistance programs, such as loan consolidation, income-driven repayment plans, and loan forgiveness. The federal government offers these programs to borrowers directly and there is no fee to apply.

The case against Libre is the third in a series of enforcement actions brought by Attorney General Healey against student “debt relief” companies. In November, AG Healey announced settlements worth $96,000 with two debt relief companies – Student Loan Processing.US and Direct Student Aid – for its allegedly unfair and deceptive practices.