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Student Loan Fraud


Students pursuing post-secondary education or attending a 2- or 4-year college often find themselves in financial hardship, and rely on student loans to help them through. Allegations about financial fraud have been raised against some student loan companies. Among the complaints against companies, such as ACS and NextStudent, are violations of consumer protection fraud laws resulting in damage to borrowers' credit ratings and increased fees.

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Student Loan Fraud

studentloanfraudarticle.jpgWhile some students may be able to take advantage of federal education loans to pay for college—such as Perkins loans or Stafford loans—many students turn to private education loan companies in order to finance their education. Some student loan lenders and servicers, including NextStudent and ACS, face allegations of denying loan payments or claiming payments were not made even though customers have records of those payments; not issuing adequate student loan statements; charging multiple late fees even though the payment has been processed; and retroactively assigning interest to payments that were allegedly missed, some a few years before.

At least one student loan class action lawsuit (case number 1:2012cv06583; Brietman v. Affiliated Computer Services, Inc. et al) has been filed against both Affiliated Computer Services (ACS), a student loan servicing company, and NextStudent which is a student loan lender, as well as US Bank, alleging they aimed to keep borrowers trapped in student loan debt. The plaintiff alleges she tried to make extra payments to pay down her principal balance, but those payments were redirected to cover interest and regular monthly charges.

Meanwhile, a student loan second lawsuit filed against ACS by Joshua G. Fensterstock—also alleging extra payments were put towards interest and not the principal balance—was reportedly sent to arbitration by the judge.


Student Loan Settlement

In 2013, a $5 million settlement was announced in a class action lawsuit against Chester Career College (formerly called Richmond School of Health and Technology). The lawsuit alleged the for-profit college was engaged in predatory lending practices while offering inadequate education. The settlement covered students who were enrolled in the school from July 2004 through February 2013.

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READER COMMENTS

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I’m in the same boat as most. Been paying 330 a month since 2006!!! Loan for 30,000. Balance was with them originally and had been transferred since but is now 32,000. I’ve more than paid my loan off. And it’s gone up??!? How? And who can help?
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ACS claimed their Loan could qualify for the Public Service Loan Foregiveness Program. After 9 years of payments, it turned out to be a lie. I've got nothing but more debt
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Someone has to help with ACS; my original loan was $23k, I now owe $96k. I was in IBR and always paid more than due, yet loans still have drastically increased. I had to renew my IBR, forwhich they failed to process my paperwork. Then they stated they were missing info, they could use my check stubs as proof of income, then they couldn't, then they could, I resent all my paperwork, which took 2 weeks to process. They then report me to the credit bureaus for being late, dropping my credit score 65 points for one late! I'm not even sure how that's possible. Now my credit score is a "poor", I can't get help, I can't help my daughter with her student loans or her apartment. I am at a loss and now completely screwed my credit.
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I have been paying AES since 2006, so far I have paid close to 15,000 and some how my orginal balance is npw higher and i still owe more. I refuse to pay any more. I dont understand how I have paid them thos much money and my balance has not moved, and it actually increased. So basically im going to be payimg this untill im 6ft in the ground. And I would love to purchurse a house or help my childeren with school 1 day, but my credit has been affected because of this. If anyone out there knows what I can do or who to call to help me plz let me know. Thank you
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I have been paying on a student loan $26,000 with ACS for 9 years. I've paid them roughly $11,000 and only $1,000 has went to the principle balance. My balance after 9 years is still $26,000. I've recently quit paying because there's no point. I have no way of getting away from ACS. they say my loan will be paid off in 2030. I can changed plans and my payment will double. Either way, the balance will never move. How does this help anyone other than ACS? I've contacted 4 Senators, a Governor, the news media, and the Ombudsman. I'm ready to start a class action lawsuit.
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I have filed many complaints with the CFPB over AES (BOA) during the Government Shutdown. Several things posted ring true in my case. There is a letter by or for Lew that shows why IBRs are being targeted for default. Turns out they want instant access to IRS quarterly reporting and manufactured - with other IBR servicers - a whopping 57% default rate to that end. Manufacture a crisis to get instant acess. They allowed the 43% to survive because cash flow is there. The 57% are probably unemployed. Target on the backs of those not working. In the CFPB response given by AES they cited leeway as long as they did not violate federal regulations. They did. People with zero income are to simply sent a statement to that effect and are to be automatically approved for IBR. That is just the gist of it. Much more happened when I released all my lian info to my senator when the government reopened. They lied to her office too. So at least I had the forethought to ask her office to contact the liason to the DOE and AES. I am going to send it all to the Trump transition team so they can stop servicers from doing the bank's dirty work through Lew to access instant IRS info with no safeguards in place for unsuspecting students.
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I have had a loan with ACS for over ten years. It started at 80,000. I have paid about 50,000 towards my loan. My loan is now 79,000. It is so obscene and dirty what ACS is doing. Some months none of my payment goes to principle...seems to change every month. Am finally investigating further and feel like an idiot for having the wool pulled over my eyes like this. Am looking for some legal advice. Thank you
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I cannot believe that ACS can get away with charging interest only on a loan and then somehow years later 12k has been added to my principle...how is this possible? Even if your only paying interest for awhile the principle should never change. I'm sick to my stomach! They do nothing to help. I asked for all of my notes on my file and they refused, they said they had to be subpoenaed. I also asked if they would take a settlement amount and they said "No" to that as well. This is unfair lending practices! Has anyone had any luck with a class action law suit?
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ACS, wont help me get my forberance completed, and keep taking on fees and my loan balances have increase OVER $9000! There needs to be a class action brought against this company. Chase bank turned over my loan to this fraudulant company!
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I had a parent plus loans thru ACS for my daughter's school. I ended up having to file Bankruptcy in 2009 (divorce), I looked for my student loans in about 2011 so I could plan on paying them when my Bankruptcy was complete, I called ACS, NELA and ever place I could think of. I finally was able to talk to a gal at ACS, she looked thru the entire federal system and told me you do not have any federal student loans. I asked her if she would be able to see them if I was in Bankruptcy, and she said yes. So when my Bankruptcy was completed, I looked for those loans again because I wanted to get them paid off so I could buy a home. I spent 3 months, calling every place I could think of and every person said the same thing, "you don't have any federal student loans". I looked at my Bankruptcy papers and found that ACS had been paid by the trustee, therefore I was under the impression that they were included in my Bankruptcy. I looked at my credit report and that is exactly what it said about my student loans, "included in Bankruptcy". I went to a lender, I applied for a Federal Home loan. He searched the Federal system also because you cannot have more than 1 Federal loan at the same time. There was still nothing. I bought a home. Now all of a sudden AES is after me saying that I owe for my student loans. I've tried everything to get help with this and I cannot find anyone to help. I'm not saying I don't owe, I'm saying, "why can't AES/ACS be accountable for losing or illegally selling my student loans"? They were gone for years, it is impossible for me to have two Federal loans. I cannot afford my mortgage and to pay these loans. AES has turned this over to a credit bureau. When is someone going to step up and help all of the millions of people who are being wronged, hurt and ruined by these loan servicers? I need a lawyer who can help! Thank you, Keri
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I had a loan for 12,000 which I didn't pay because I was in financial hardship now ACS took it over and added 12,000 on to the principal. They said that they can add as much as they want up to 25 percent which doesn't makes sense. I keep making payments and it keeps going up. I paid them 8000 and it keeps going up they keep charging interest. Who do I talk to I need a lawyer.
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I am also stuck in ACS. They refused to give me a deferent and is charging me $100 a month which I cannot afford. Great Lakes is working with me and has half the loan. They are doing a consolidation for me but ACS will not provide the information to Great Lakes. They are instead charging late Fees and showing me as in default. Now they insist on my applying for an IBR. The say my account is being audited because the interest is calculated wrong, but will not give me a time of resolution. This was a month ago. I called yesterday agent told me what the payoff figure would be I asked about 6 times to make sure the amount was accurate and there was no error. She assured me it was correct. I then said that I can expect when Great Lakes sends over another request (this will make 4 times) that it will be completed. Once she heard that she wanted to put me on hold to review my account. Surprise Surprise she made a mistake and the payout was incorrect and no timeline on when they will have accurate information. I do not understand how they can legally get away with this. What recourse do I have?
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Need help trying to get my loan out of the Acs system. It was bought by them without my knowledge a while back and they do nothing to help with forbearances and have trouble getting in touch with them. And dont want my credit to suffer from this fraudulent company.
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My private student loan was paid off in full, however there was a dispute with ACCESS who spread my private loan payment throught all the student loans I had with them (without my consent or permission). I had specifically in writing, and noted on each auto-drafts, that the payment was ONLY for my "private grp G loan" ... so even though the loan was paid off in full, they sold it to ACS who added late charges, finance charges and increased rate charges before sending the loan to ERS Enterprise Recovery Systems, thereby destroying my credit rating ... aaahhhhhh ... and ACCESS sent me the payment history that shows all my payments and phone calls begging them to correct the dispersement ... yet Experien still says it is a valid debt ... BS!
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Acs is saying I have missed 18 payments and charged me late fees and recorded to my credit, even though I am on autopay. They are single handedly ruining my credit. I want to start a class action lawsuit against them, please help.
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My student loans from 2007-2008 were being serviced by Chase, then moved to ACS. Unable to find work after graduating in Dec.2009 I went back to school in the spring of 2011. In 2012 I was out of financial aid, 5 classes short of my degree. I have been able to get deferments, but last July when I logged in to check my account I found that my account was at $0. After further searching I found that my loan had been transferred, but no mention of where to. I've been unable to get anyone to talk to me & no mail from them. Now Friday Feb. 19th I get a letter in the mail from a collection agency about my loans with the US Dept of Education. Today the 23 of February I learn that they have taken our entire tax refund!! Please beware, if you're behind with them document everything! We need to all file a lawsuit against them!
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1993: owed $23,000 in student loans to Sallie Mae

Deferred, and paid some (am a single mom; father is deceased)

2000: owed $58,000 in SAME student loans (all monies paid went to interest).

Paid over $50,000 into ACS (consolidator of student loans without my consent) ...

In 2007, owed $80,000 (no new loans, that was all interest despite paying double the original amount).

Job loss + ... = now owe (after several attempts to IBR with ACS and their screw up on forms, and deletions and finally, erroneous personal information leaked to wrong people and my identity stolen)...

I now owe $175,000 on the original $23,000. THAT is not a typo.

Oh, and the IBR was approved for ME under someone else's SS # (that is also not a typo) ...

And I'm now in default.
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I have tried several times to get on the income based repayment plan and ACS has been giving me the run around charging me late fees and making me agreements to deferre my loan and add the fees to the principle so get more in debt. I have requested serval times to be sent the online form for the repayment plan and Acs has failed to do so. And when I did sent in the appropriate forms they tell me to not call for a few days and then they send me more late fees. I have other student loans and it super easy to get aid all I had to do was IBR plan on student loans gov webpage and contact my other company but Acs is just stiffing me for more money it has almost been over a year and I'm still not on the plan. I Am beyond livid with how this company treats its customers. These guys are really hoping I default on my loan and I don't know what to do with them. I don't make enough money to even eat 2 meals a day and these guys want me to pay hundreds of dollars if not a thousand a month with the late fees.
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I have tried to get forbearances and work out payments with ACS. ACS claims that I used up all my forbearances which is untrue considering I was on the income based repayment plan. For some reason the plan was not renewed and my loans are now 3 months not payed and ACS claims I owe $ 3,000 how it that possible when my loan payments were only $400.00 a month. It is my belief that this company want people to default on their loans.
Posted by

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I have ACS and have been making payments YEARS. In reviewing my last 25 payments from 12/19/2013 to 11/16/2015, only 59.87% of my payments have gone to the principal and 39.33% has gone to interest. With a loan that started out as $40,000 fourteen years ago, I still owe b little over $29,000. I will NEVER get out from under this student loan - is there a suit against ACS for predatory lending that I can join?
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I have ACS for federal and private student loan from undergrad school that I finished in 2005. I have been making payments monthly since then with the exception of deferment when being back in school. My original amount for the federal loan in 2005 was $10,500 and now, 10 years later the pay off amount is $10,535????? I checked the payment history and no matter how much more I pay than the monthly payment at least 75% and sometimes 100% is going to interest... Oddly, the private loan doesn't appear to be having the same questionable payment allocations. This can't be right..
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Check your Application and Promissory Note for a Student Loan Just above your signature does it state that "I am entitled to an exact copy of this Promissory Note, The Notice of Loan Guarantee and Disclosure Statement and anh Agreement I sign by signing this Promissory Note"?

Please let me know - I am assisting a former student with a similar problem. The lender is stating he gave his permission when he signed this Application and Promissory Note for a Student Loan he also was signing all of the other things I just mentioned. Can you believe it?
Posted by

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Nextstudent Acs AES National collegiate trust purchased the fake loans no continue to defraud my credit they have no proof of canceled checks
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ACS has billed me with student loans that I never signed for and now my credit score is severely damaged. I have sent them a letter asking for copies of signed documentation regarding the loan via certified mail almost a month ago and have still heard no word. Meanwhile my credit score continues to get dinged each month.

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