Many consumers require assistance and guidance while navigating the confusing process of seeking federal assistance and student loans. In a recent action, the Consumer Financial Protection Bureau (CFPB) has filed a complaint and proposed consent order in federal court against Student Financial Aid Services Inc. This company has been commonly used by students and parents to determine eligibility for student financial aid through its websites, as well as related call centers which offer fee-based help when filling out the federal government’s Free Application for Federal Student Aid (FAFSA).
The company has been accused of providing consumers with misleading information about the total cost of its subscription services and consumers were made to pay automatic recurring and unauthorized charges. According to the complaint filed by the CFPB, consumers were billed for annual subscriptions without their knowledge or consent and these subscriptions were renewed without authorization. Currently, the proposed stipulated judgment is not a proven violation of the law and is not effective until approved by the presiding judge of the U.S. District Court for the Eastern District of California.
Funding higher education is a difficult and costly endeavor that many Americans face and federal financial assistance is sought by a majority of students who required loans to pay for their education. Misleading information and costly service charges can increase potential debt for students who are already economically stressed. However, in a positive effort to protect consumers in the future, Student Financial Aid Services, Inc. has announced its intention to transfer the website FAFSA.com to the U.S. Department of Education. This transfer will help students and parents avoid confusion as to whether they are on the official FAFSA website or a commercial website and will benefit future consumers seeking information to finance their education.