The Federal Trade Commission (FTC) has issued a stark warning to student loan borrowers: beware of scams promising quick loan forgiveness. The agency recently shut down a network of companies, including California-based Panda Benefit Services and its affiliates, for allegedly defrauding borrowers out of millions of dollars in illegal fees.

This crackdown, announced on June 6th, highlights a significant surge in deceptive debt-relief schemes targeting individuals struggling with student loan debt. These fraudulent operations often masquerade as legitimate partners of the Department of Education, luring victims with promises of rapid loan forgiveness in exchange for upfront payments. The reality? Borrowers are left financially worse off, burdened with additional fees and no closer to debt relief.

The FTC’s action permanently bans Panda Benefit Services and its affiliates from operating in the debt-relief industry. This serves as a crucial reminder to remain vigilant against these predatory practices. Before engaging with any student loan debt-relief company, thoroughly research their legitimacy and avoid any that require upfront payments for services they claim to provide in connection with federal student loan programs.

The FTC encourages anyone who believes they have been the victim of a student loan scam to report it immediately. Protecting yourself from these schemes requires due diligence and a healthy dose of skepticism. Remember, legitimate debt-relief programs won’t demand upfront fees.