In October 2017, the Federal Trade Commission (FTC) and several states launched Operation Game of Loans to help fight deceptive student loan debt relief scams. Stemming from this program, the FTC settled with Student Debt Doctor (SDD) and American Student Loan Consolidators (ASLC), two Florida-based student loan debt relief companies, over collecting illegal upfront fees and falsely promising to help consumers enroll in government programs to reduce or forgive their student loan debt.

SDD entered into a stipulated judgment with the FTC on November 30, 2018. The stipulated judgment bans SDD from offering debt relief products, prohibits SDD from making misrepresentations related to financial products and services, and prohibits SDD from engaging in unlawful telemarketing practices. SDD must also pay $2.2 million as part of a partially suspended $13 million judgment.

ASLC was charged with misrepresenting that it is affiliated with the Department of Education and its servicers , “trick[ing] consumers into believing that illegal upfront fees of up to $899 were being used to pay off their student loans.” This misrepresentation led to ASLC collecting “$23 million from student loan borrowers by falsely promising loan forgiveness, lowered monthly payments, and reduced interest rates.” ASLC also entered into a stipulated judgment on November 30, containing many of the same prohibitions as the SDD stipulated judgment. ASLC is required to pay $1.3 million as part of a partially suspended $23 million judgment.

insideARM Perspective

These two settlements were entered into right around the time the Secretary of Education Betsy DeVos gave a candid speech addressing the student loan crisis. In this speech, DeVos discussed how over the past ten years, the student loan debt balance has grown exponentially, which is primarily due to an increase in borrower debt load. With student loan debt balances growing rapidly and starting salaries failing to keep up, many borrowers are left an intimidating amount of debt and looking for a way to bear the burden. The FTC’s Operation Game of Loans looks to stop bad actors who attempt to prey on consumers looking for relief.


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