The corporate headquarters of J.P. Morgan Chase & Co. , The JP Morgan Chase Tower on Park Avenue, Midtown, Manhattan, New York.
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earlier this week, c. B. Morgan Chase closing college financial aid platform Frank, which it acquired in September 2021 for $175 million, Alleging that he was misled about the size of the startup.
Consumers who have used the platform may also have been scammed.
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According to JPMorgan, founder Frank Charlie Javis He told the bank that more than 4 million students have registered with the company, which promises to make it easier to apply for student loan and financial aid. But when the bank sent marketing emails to a group of 400,000 franc customers, about 70% of the messages bounced back, the bank said in a statement. The lawsuit was filed last month in the Federal Court.
Earlier, JPMorgan spokesman Pablo Rodriguez Referred to In her lawsuit against Javis, the CNBC reporter said, “Any dispute will be resolved through the legal process.” Javis’ attorney, Alex Spiro, did not respond to an email seeking comment.
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Before JPMorgan acquired the startup in 2021, lawmakers and the consumer watchdog had expressed concerns about Frank’s marketing allegations.
Congressmen from both parties wrote a letter to the Federal Trade Commission in July 2020, saying Frank was “creating false hope and confusion for students” by announcing a request for pandemic relief funds, including newly available emergency grants for students.
“These funds are distributed by the individual institutions and at their discretion, and therefore, it is impossible to make a standardized and legitimate application for this funding,” the lawmakers said. books , Adding that they suspected the company was exploiting students’ data for profit.
In response, the FTC sent warning speech to Frank, stating that a number of the claims on his website may be “unlawfully misleading consumers”. For example, he said, consumers can get a cash advance of up to $5,000 on their student loans without being charged any interest or fees, even though Frank charged a fee of $19.90 per month.
Besides the problems pointed out by government officials, higher education expert Mark Kantrowitz said he’s noted other questionable claims made by Frank. At one point, the company said it could complete people’s Free Application for Federal Student Aid, or FAFSA, in just four minutes.
According to the US Department of Education, indicated that it takes about an hour For new applicants to complete the form, which is the main way students request financial aid to help them pay for college.
“If it’s too good to be true, it probably is,” Kantrowitz said.
There are plenty of free resources families can turn to to help with financial assistance, said Betsy Mayotte, president of the Institute of Student Loan Counselors, a nonprofit organization.
“The simplest thing to keep in mind is that no one should have to pay for a student loan or financial aid,” Mayotte said. “Doing so will not allow you access to a program for which you would not normally be eligible.”
The best place to start looking for this help is the Ministry of Education website. studentaid.govMayotte said.