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Financial Aid Agency Secretly Took Money From the Accounts of Thousands of College Applicants

The student loan debt crisis has hit its peak, according to many economists and education officials, and it almost seems like the crisis can’t get any worse. Except that a business called Student Financial Aid Services, which “helps” people apply for financial aid for high education, has apparently been taking money out of the accounts […]

Financial Aid Agency Secretly Took Money From the Accounts of Thousands of College Applicants

The student loan debt crisis has hit its peak, according to many economists and education officials, and it almost seems like the crisis can’t get any worse.

Except that a business called Student Financial Aid Services, which “helps” people apply for financial aid for high education, has apparently been taking money out of the accounts of its clients without their consent. According to the Washington Post, the company has taken out at least $5.2 million from the accounts of 100,000 people.

After the Consumer Financial Protection Bureau (CFPB) accused the company of this practice, it didn’t take long for the Sacramento-based service to deny the allegations yet agree to refund the money to “settle the charges.”

According to the Huffington Post, the federal government is not afraid to shut down websites that are accused of an illegal activity, but this would be the first time that the government actually took over the website of a business. Student Financial Aid Services’ website — FAFSA.com — is now being operated by the Department of Education, even though the website originally belonged to a private company.

According to this report, SFAS agreed to transfer control of the domain FAFSA.com over to the Department of Education on July 13, after complaints surfaced that parents and students were getting confused about the website.

FAFSA, ironically, stands for Free Application for Federal Student Aid, and it receives millions of applications annually from prospective college students who need financial assistance. The latest allegations against SFAS are separate from the initial website exchange, but it’s clear that the company was likely profiting off the confusion of its website for years on end.

Not only does this messy situation emphasize the perilous state of the student loan debt crisis, but it proves another point: It only takes about 10 seconds for someone visiting a website to decide on its credibility, and it would be hard for SFAS to argue that it was ignorant of this fact when it operated FAFSA.com.

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