My Education Solutions (MES), a San Antonio based student loan debt relief company, claims its program and services successfully reduce student loan debt by helping consumers qualify and enroll in federal student loan forgiveness programs.

However, a Texas Attorney General lawsuit is accusing the business of violating several Texas laws for allegedly failing to make timely payments on customer's student loans, exaggerating savings claims on its advertising, and charging consumers unfair monthly fees.

The lawsuit comes after BBB provided the Attorney General’s Office its findings following an extensive BBB investigation into MES’ business practices.

Specifically, MES advertised that its clients saved “70% on average off their monthly student loan payments and student loan debt”. However, BBB’s investigation found that the data provided by MES to substantiate these claims contained inconsistent and inaccurate information such as duplicate account information, altered monthly payments, and missing data.

Additionally, BBB found several consumers enrolled in MES’ program who would either obtain zero savings or would ultimately pay more money by the end of their loan period.

BBB’s investigation also found evidence of MES failing to make timely payments after BBB received a consumer complaint stating that he had received a notice from his student loan provider indicating multiple late payments.  

The Attorney General’s lawsuit found similar issues after allegedly finding 126 accounts with the Pennsylvania Higher Education Assistance Agency had student loan payments that were more than 15 days delinquent. Twenty-nine of those accounts also showed missed, partial, and late payments. The lawsuit states “Because MES has accounts with other loan servicers, the figures provided by PHEAA may just be a small percentage of the consumer accounts that MES has caused to become delinquent.”

The lawsuit claims when an employee brought concerns about missed payments to MES owner, Christina Randell, she was fired.

Furthermore, the lawsuit alleges MES used fake names in an authorization form which allowed its representatives to “discuss any and all debt related matters” on behalf of its customers. MES also allegedly filed for forbearance on behalf of its customers without properly informing them.

In response to BBB, MES modified its website to include an explanation page for its advertised claims, however, it did not substantiate BBB’s concerns. Additionally, the company claimed that it was unaware of any client that was currently being paid late as determined by the U.S. Department of Education.

This isn’t Randell’s first government action. Debt Free Angels (DFA), also run by Randell, was issued two separate Cease and Desist orders by the Office of Consumer Credit Commission (OCCC) in Texas and the Illinois Department of Financial and Professional Regulation.  The OCCC order accused DFA of operating in Texas without proper registration. Additionally, the order states DFA’s contracts did not contain the required disclosures and it cited the company for charging excess fees.

My Education Solutions maintains an F rating with BBB and its lawsuit is currently pending.

Looking for assistance on your student loans? Here’s what you should know. A student loan debt relief company can perform the same services you or your student loan debt provider can do as well. The companies that promise relief may be trying to take advantage of you. Here are some red flags to be aware of:

Never pay an up-front fee. It’s illegal for companies to charge you before it makes any changes to your student loan. If you pay upfront to reduce or get rid of your student loan debt, you might not get any help or your money back. Avoid companies that require payment before they complete any service, especially if they try to get your credit card number or bank account information. Assistance is available and free through your student loan provider.

Be careful with promises of immediate loan forgiveness or debt cancellation. Businesses might say they can quickly get rid of your loans through a loan forgiveness program, programs most people won’t qualify for. Debt relief companies cannot negotiate with your creditors for a “special deal” under these federal student loan programs. Payment levels under income driven payment plans are set by federal law and, for most borrowers, loan forgiveness is only available through programs that require many years of qualifying payments.

A Department of Education seal doesn’t mean it’s legit. Companies may use official-looking names, seals and logos, and tell you they have special access to certain repayment plans, new federal loan consolidations, or loan forgiveness programs. They don’t. If you have federal loans, go to the Department of Education directly at StudentAid.gov.

Don’t give away your FSA ID or PIN. Be cautious about companies that claim it needs your FSA ID or PIN to help you. Your PIN is issued by the U.S. Department of Education to allow access to information about your federal student loans. Giving companies this information allows it to perform actions on your student loan on your behalf.

Demands that you sign a “third party authorization.” You should be wary if a company asks you to sign a “third party authorization” or a “power of attorney.” These are written agreements giving them legal permission to talk directly to your student loan servicer and make decisions on your behalf. In some cases, they may even step in and ask you to pay them directly, promising to pay your servicer each month when your bill comes due.

ABOUT BBB®: For more than 100 years, the Better Business Bureau has been helping people find businesses, brands and charities they can trust. In 2019, people turned to BBB more than 183 million times for BBB Business Profiles on nearly 5.8 million businesses and Charity Reports on 11,000 charities, all available for free at bbb.org. The International Association of Better Business Bureaus is the umbrella organization for the local, independent BBBs in the United States, Canada and Mexico. BBB Serving the Heart of Texas serves 105 counties in Austin, Bryan, Corpus Christi, Fort Worth, Permian Basin, San Antonio and Waco.