Student Aid Institute Illegally Tricked Borrowers Into Paying Fees for Federal Loan Benefits

WASHINGTON, D.C. — The Consumer Financial Protection Bureau (CFPB) took action to halt a student loan debt relief scam that illegally tricked borrowers into paying fees for federal loan benefits and misrepresented to consumers that it was affiliated with the Department of Education.

The CFPB is ordering the student debt relief company, Student Aid Institute, Inc., and its chief executive officer, Steven Lamont, to pay a penalty, halt debt relief services, and stop charging affected customers. The CFPB is also permanently barring the company and Lamont from the debt relief industry.

“We see more and more companies and websites demanding large upfront fees to help student loan borrowers enroll in income-driven plans that are available for free,” said CFPB Director Richard Cordray. “These practices bear a disturbing resemblance to the mortgage crisis where distressed consumers were preyed u