FTC to Refund $4 Million to Student Loan Scam Victims

By Alexander Hernandez, J.D., Professor, and Author of Consumer Bankruptcy Law (Routledge).

Updated on October 2, 2025.

In a landmark move to protect student loan borrowers, the Federal Trade Commission (FTC) has announced significant refunds due to student loan scams. These schemes, which preyed on borrowers seeking relief from their student debt, involved deceptive practices such as false promises of loan forgiveness and illegal advance fees.

The FTC’s decisive action underscores its commitment to cracking down on predatory practices and ensuring that victims receive the financial restitution they deserve. Continue reading to confirm if you qualify for a reimbursement.

The Federal Trade Commission will refund $4 million plus in refunds to student loan borrowers who lost money to debt relief scams. This includes companies using the following names:

• Mission Hills Federal;
• Federal Direct Group;
• National Secure Processing and
• The Student Loan Group.

The FTC filed a lawsuit against Mission Hills Federal and Federal Direct Group, where the FTC alleged that student loan borrowers paid upfront fees and collected student loan payments monthly as their new loan servicers. At times, payments were not even made to the correct student loan lender.

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As a result, the FTC will reimburse 27,584 student loan borrowers. If you have questions regarding a refund, you can contact JND Legal Administration at 1-844-566-0108. The FTC Frequently Asked Questions page can be accessed via this link.

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Updates:

• January 31, 2025.