A proposed Federal Trade Commission order would permanently bar an operator from debt-relief work and telemarketing after the agency accused her and others of taking more than $45.9 million through false student-loan-forgiveness promises. The order still requires court approval, and the underlying conduct remains described as allegations rather than a criminal conviction. The proposed judgment is not a $45.9 million refund fund for borrowers. Much of the monetary amount would be suspended because of the operator’s reported inability to pay.
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What the proposed FTC order says
The FTC’s July 21 announcement identifies Dennise Merdjanian as an operator of the challenged business. The proposed order would permanently ban her from debt-relief services and telemarketing. It also imposes a judgment above $45.9 million, but that amount would be partially suspended based on inability to pay. If the financial disclosures were materially false, the full amount could become due. A stipulated order gains force only after the federal district judge approves and signs it.
The headline judgment and collectible assets are not the same. Suspension based on inability to pay means the full $45.9 million is not currently expected to be collected unless the financial disclosures prove materially false. Consumers should not treat that face amount as an available reimbursement pool.
Any later refund would require a separate FTC administration notice identifying recipients and delivery. Until such a page exists, a caller offering to secure part of the judgment for a fee is using the enforcement case as bait for another transaction.
The conduct regulators alleged
The FTC sued Superior Servicing and Merdjanian in 2024, alleging that the operation pretended to be affiliated with the Department of Education and falsely promised loan forgiveness. The agency later added companies and other operators to the case. According to the commission, the group took more than $45.9 million from consumers. The FTC continues to describe Merdjanian’s role as alleged because the settlement is not a criminal conviction or trial finding. A settlement can resolve litigation without a trial ruling that proves each allegation. Orders against other defendants had already been entered before this proposal. The Merdjanian agreement and a default order against corporate defendants would resolve the litigation against the remaining defendants, according to the FTC.
Why forgiveness pitches trap borrowers
Borrowers with older federal loans, income-driven repayment plans or confusing servicer histories can be especially receptive to a caller who promises a government cancellation program. Parents and grandparents who co-signed private education debt may also respond to a pitch that appears to remove a family burden. The most important distinction is between assistance and eligibility. A private company cannot create federal forgiveness. Eligibility comes from the law and Department of Education programs, and applications can be completed through official channels without paying a company to invent access.
The FTC’s consumer page on student-loan-forgiveness scams identifies upfront fees, pressure and demands for Federal Student Aid credentials as warning signs. An FSA ID functions as a legal identity credential and should not be handed to a telemarketer.
Federal Student Aid’s forgiveness-scam warning says borrowers never have to pay for help with federal student loans and should not share an FSA ID. The credential carries the borrower’s legal signature, so handing it to a company can allow unauthorized plan changes or applications.
How borrowers can verify real relief
A borrower can review legitimate options through the Department of Education’s forgiveness and cancellation portal. The account shows federal loan details and links to program requirements. Private loans are governed by their contracts and do not become federal loans because a caller uses government language. Anyone who paid a relief company should collect contracts, bank records, emails and call logs. The card issuer or bank may have dispute procedures, and a state attorney general or the FTC can receive a fraud report. Quick reporting matters when recurring drafts are still active.
Passwords should be changed if a company received an FSA ID or email login. Bank and card access should be reviewed, and multifactor authentication should be enabled where available. A borrower should contact the official servicer directly to learn whether unauthorized changes were made. No consumer should assume the proposed $45.9 million judgment means a check is coming. The order’s financial provisions are largely suspended, and the FTC announcement does not establish a new claims process. Any future refund would appear on an official administering page with clear eligibility information.
The case shows why the word “forgiveness” needs a source. A legitimate program has a statute, agency page and defined eligibility test. A paid shortcut that cannot identify those elements is selling confidence rather than relief.
A payment ledger can expose whether money reached the loan. Each debit to a relief company should be compared with the official servicer’s transaction history. If the loan balance and payment record do not move, the drafts are company fees rather than payments toward the debt.
Testing a debt-relief offer before paying
A legitimate offer should identify the exact federal program, controlling agency and eligibility rule before asking for personal information. Vague references to a “new law” or “Biden/Trump forgiveness” are not enough. The borrower can type StudentAid.gov directly and compare the pitch with the official program description. Payment method is another test. A company that demands an immediate card charge before providing written services or directs payments away from the official loan servicer creates unnecessary risk. Monthly drafts to a private company may be service fees rather than loan payments, allowing the real debt to become delinquent.
Borrowers should verify changes after any third-party help. Contact details, repayment-plan selections and authorized representatives in the federal account should match the borrower’s instructions. Unknown changes should be reversed through Federal Student Aid and the servicer. Older relatives helping with student debt should not provide their own Social Security number, home equity or retirement-account access to qualify someone else. Federal eligibility belongs to the borrower and loan, not to a paid intermediary with access to family assets.
A written comparison of the promised result, total fee and free official alternative often reveals the problem. If the company cannot explain what it does beyond submitting a form available without charge, the payment buys convenience at best and may buy nothing. Borrowers who need legitimate help can contact the servicer, Federal Student Aid or a nonprofit counselor and request explanations in writing. A company that discourages independent confirmation is signaling that its value depends on controlling the information rather than improving the loan.
This article was researched and drafted with AI assistance and reviewed against the linked primary sources.
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Warren Cohen is a finance writer based in Phoenix, Arizona, covering personal finance topics including credit, banking, and beginner investing. He earned his degree in business administration from Arizona State University and began his career working in consumer finance, where he gained direct experience with lending and credit systems. He now writes for personal finance websites and fintech platforms, focusing on clear, practical content that helps readers make informed financial decisions.
