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Student loan payment scam stole millions, kept it secret, FTC alleges

The complaint says two companies changed clients' contact information so they didn't learn from the government that their payments weren't being made.

Two companies that promised to help students get out from under loan debt allegedly kept millions of dollars in payments from clients for themselves and changed clients' contact information to prevent them from finding out about the scam, the Federal Trade Commission announced Thursday.

The FTC claims Mission Hills Federal and Federal Direct Group took more than $23 million from borrowers while giving bogus promises to pay down loans and lower monthly payments. The companies also allegedly tricked students into submitting payments to them.

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Why didn't clients hear from the federal government about their loans not being paid? Because, according to the FTC, the companies used personal information from the students to change their contact information on U.S. Department of Education websites. That, in turn, cut down on how many contacts the federal government had with the students.

The FTC advises students looking to get out from under loan debt to visit StudentAid.gov/repay.

TEGNA has reached out to Mission Hills Federal for comment. No contact information for Federal Direct Group was immediately available.

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