The Federal Trade Commission (FTC) helped end a $10 million student loan debt relief scheme that allegedly collected illegal advance fees and made deceptive claims that it was affiliated with the U.S. Department of Education.

Since at least January 2023, Superior Servicing violated the FTC's Impersonation Rule by making false claims through telemarketing calls and personalized mailers to borrowers, the agency said.

A federal court recently placed the Nevada-based company under a temporary restraining order and froze its assets after an FTC lawsuit in 2023.

How Were Student Loan Borrowers Duped?

Superior Servicing had allegedly made false claims that customers could obtain benefits such as loan consolidation, reduced interest rates, reduced monthly payments, or loan forgiveness.

Operators at Superior Servicing collected up to $899 as initial payments from borrowers, in addition to monthly payments that borrowers were falsely told went towards their total student loan debt, the FTC said.

The company allegedly falsely claimed to work with or be affiliated with the Department of Education and, in some cases, told borrowers they could stop making payments toward their existing loan servicers.

“The defendants promised consumers student debt relief and forgiveness but gave them virtually nothing, keeping over $10 million for themselves and leaving consumers deeper in debt,” said Samuel Levine, Director of the FTC’s Bureau of Consumer Protection.