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FTC obtained a temporary restraining order to halt an alleged student loan debt relief scam
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Operators allegedly impersonated the U.S. Department of Education and collected up to $8.8 million in illegal fees
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Consumers were charged upfront monthly fees as high as $1,400 for services that did not exist
The Federal Trade Commission has moved to stop what it describes as a widespread student loan debt relief scheme that targeted financially burdened borrowers with false promises of loan forgiveness.
The agency said it secured a temporary restraining order against companies NERD Solutions Inc. and ED REF Inc., along with their operators, over allegations they misled consumers and collected millions in illegal fees.
According to the FTC, the defendants posed as affiliates of the U.S. Department of Education or legitimate loan servicers, using deceptive telemarketing tactics to reach consumers — including thousands listed on the National Do Not Call Registry.
The agency alleges that, beginning in at least February 2022, the operation lured borrowers with claims that they could secure student loan forgiveness or significantly reduce debt. Victims were then charged upfront monthly fees that sometimes reached $1,400, despite federal rules generally prohibiting such advance payments for debt relief services.
Allegedly collected $8.8 million
In total, the scheme is accused of collecting at least $8.8 million from consumers already struggling with student loan obligations.
The FTC’s complaint charges the defendants with violating multiple laws, including the FTC Act, the Telemarketing Sales Rule, the Impersonation Rule, and the Gramm-Leach-Bliley Act.
A federal court in the Central District of California granted the temporary restraining order on April 13, 2026, effectively halting the operation while the case proceeds.
The FTC noted that its actions are part of ongoing efforts to combat scams targeting student loan borrowers. The agency also reiterated that it does not demand upfront payments or promise loan forgiveness, urging consumers to be wary of similar claims and report suspected fraud.
The case remains pending, and the allegations have not yet been proven in court.
Mark HuffmanReporter
Mark Huffman has been a consumer news reporter for ConsumerAffairs since 2004. He covers real estate, gas prices and the economy and has reported extensively on negative-option sales. He was previously an Associated Press reporter and editor in Washington, D.C., a correspondent for Westwood One Radio Networks and Marketwatch.
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