Irvine California Employee Spills the Beans on Student Loan Assistance Efforts to Deceive Consumers

I received the following tip from an alleged employee of an Irvine based student loan assistance company.


I worked for one of the largest Federal Student Loan Consolidation companies in Irvine, California. The processing department managed 15,000 clients for over 4 years. These clients were solicited through various marketing channels and were from across all 50 states. Each client was charged at least $1,195.00 upfront plus up to $40.00 per month for a minimum of 10 years. The sales department has over 150 sales reps that would sell each client to sign up with in order to complete work that can be done by the client for free on their own.

In order to make the sale, sales agents would falsely increase family sizes on government documents in order to deceptively get clients reduced or free monthly payments on their Federal student loan payments.

Sales agents would also lie to clients stating that their student loans would be forgiven immediately, or that their loans were interest-free.

In order to keep clients from canceling, they would deceive the client into believing that they wouldn’t be able to reapply for at least 12 months. Additionally, they would deceive clients by stating that the fees charged would go into a dedicated consumer escrow account and the fees would not be released until the work was done. However, the fees charged would be released to the company immediately. No statement of work completed was ever required in order to release funds to the company.

The processing department the submission of consolidation requests to the Federal student loan servicers, such as NelNet, Fedloans, etc. In order to do so, the processors would call the servicers and fraudulently pretend to be the client using the client’ personal and private identifying information such as Social Security Numbers without the client’s knowledge or consent.

Each processor had very easy and open access to 15,000 client’s personal information like Social Security information and banking information. The processors would obtain paystubs from clients to calculate the consolidated monthly payment.

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If the payment was not like what the sales agent sold the client on, they would modify the client’s pay stub to reflect a lower gross income without the client’s knowledge or consent.

Processors were trained to lie to the loan servicers and state that clients are unemployed in order to get them approved in the income-driven plans when clients were actually actively employed. The processor would also increase the family size and falsely report the taxable filing status of the client to obtain a lower monthly payment.

Forbearance request forms were forged and signed by the processor acting as the client and faxed to servicers without client approval. Other Department of Education documents were forged on behalf of the client, includes the master promissory note along with the income-driven request forms and sent to the Department of Education.

Both the sales agent and processor assigned to each client file would also create or modify and a client’s FSA ID. They would use the client’s private information in order to create a user id or password or to modify the client’s existing FSA ID.

The company would use multiple VPNs for this not to trigger any warnings at the Department of Education. They would also change the client’s mailing address with their loan services to one of the multiple virtual addresses owned by the company in order to intercept any documents relating to the Federal student loans of the client.

They would not forward the mail to the client either while they were an active client or after they had canceled. Email addresses were created for every client in order to redirect any electronic communications regarding the client’s student loans to the company and its employees without the client’s knowledge.

In addition to the up-front fees of at least $1,195.00, clients were charged monthly fees of up to $40.00. The enrollment of the monthly fee for a minimum of 10 years was a requirement for each client. They could not opt-out of enrolling into the monthly upon enrollment in the program.

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The client was told that these fees were also going into a dedicated client escrow account. However, they were not. These fees were charged in order for the processor to submit annual recertification for the federal student loan consolidation programs. There were no other benefits to the client for paying the additional $40.00 for a minimum of 10 years.

In order for the processor to submit the recertification, they would also falsify government documents, modify paystubs, use the client’s private FSA ID or call the services while pretending to be the client to make changes to their account or request updates without the client’s knowledge or consent.

In order to avoid detection and minimize the risk the principal officers [ ], [ ], [ ] and [ ] created at least 3 separate companies and 15 or more DBAs to funnel clients through.

The companies at hand: [ ] (processing), [ ] (sales), [ ] (sales), [ ] (payroll) and other DBAs were opened in order to limit and/or spread out the total number of consumer complaints to the BBB, FTC, various State Attorney Generals and other consumer protection agencies and to spread out the total number of consumer chargebacks across different entities. Some entities would be closed and new ones opened as complaints or chargebacks piled up.

2 thoughts on “Irvine California Employee Spills the Beans on Student Loan Assistance Efforts to Deceive Consumers”

  1. steve could you tell me who this company is i have used a company out of urvine before with my student loan debt

    can you share the name


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