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The Consumer Financial Protection Bureau filed a lawsuit against Student Financial Resource Center and two related companies in 2015, accusing them of sending deceptive letters to students and their families that helped the businesses collect at least $4.7 million in fees from 76,000 customers.
Also that year, the companies agreed to stop marketing their services in Iowa, pay a $25,000 fine and send refunds to any Iowans who ask for their money back.
“Student Financial Resource Center and College Financial Advisory scammed thousands of students by masquerading as government agencies and other trusted organizations,” CFPB Director Richard Cordray said in a news release. “Students and families were looking for information on how to pay for college, instead they were illegally charged millions of dollars for sham financial services.”
Enforcement actions: The agreement with Iowa officials came after the attorney general alleged that the company had sent out deceptive letters that offered to provide services for a fee that are available for free from the U.S. government, the state said in announcing the settlement. As part of the agreement, the company denied any wrongdoing.
The CFPB lawsuit alleges the company sent out letters between 2011 and 2015 to high school seniors, college students and their families. The letters contained deceptive official-looking seals, warned of a fake filing deadline and promised to connect students to financial aid by exploiting people’s unfamiliarity with the Free Application for Federal Student Aid, or FAFSA, the government said.
Fees collected ranged from $59 to $78, depending on the year, the agency said in announcing the lawsuit.
What the company claims to provide: Assistance to students and families seeking college financial aid. Its website boasted that it “saves students valuable time by conducting precise general research to match student’s qualifications and background to available free merit and need-based financial aid programs,” the CFPB lawsuit said.
Based: San Diego
Management: Armond Amir Aria, owner/CEO
Sources: Iowa attorney general; Consumer Financial Protection Bureau