This company is on the NerdWallet Student Loan Watch List. The list flags student-loan businesses and individuals hit by enforcement actions, court judgments or liens, or bad ratings from the Better Business Bureau. Learn more in Who Gets Listed.
Direct Student Aid agreed in 2015 to cease operations nationwide after the New York attorney general alleged that it broke state and federals law by misleading consumers and charging upfront fees for document processing and repayment plans.
Officials in Massachusetts and Illinois investigated the company and alleged that Direct Student Aid had violated state laws.
“We will not tolerate companies that deceive consumers who are trying to reduce the burden of their student loans – plain and simple,” New York Gov. Andrew Cuomo said in a news release.
- The company and its executives, Thomas Panik and David Stein, agreed to a consent order in New York that included a $10,000 civil penalty. Direct Student Aid violated state and federal laws by charging illegal upfront fees and misrepresenting debt-relief and credit-repair services, the New York attorney general said. The company agreed to amend its website to state that its services could be performed for free. The company also agreed to stop saying or implying that it was affiliated with any government program, including the U.S. Education Department.
- Direct Student Aid agreed to pay $40,000 to Massachusetts customers under an assurance of discontinuance in 2015. The state attorney general alleged that the company harmed student loan borrowers by charging fees prior to completing services, failing to notify customers of the rights to cancel, making untrue or misleading representations and making misleading offers to its consumers. In the agreement filed in Suffolk County Superior Court, the company did not admit or deny any of the attorney general’s alleged violations.
- The Illinois attorney general sued Direct Student Aid and its executives in 2015 on accusations that it failed to inform customers its services could be performed for free. The attorney general accused Direct Student Aid of charging upfront fees and failing to perform the agreed-upon services, illegally requiring consumers to sign extensive power-of-attorney agreements and failing to acquire an Illinois debt-settlement license.
Based: Delray Beach, Florida
Management: Thomas Panik, owner; David Stein, president
Related companies: Interactiv Education LLC, parent company; ProTech Support LLC; TMSD Industries LLC; Carefree Insurance; Clear Choice Marketing LLC; Elite Health Options; Home Diagnostics Inc.
Sources: Florida State Deeds; Illinois court records; Massachusetts court records; New York court records