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California Woman Arrested Over $6M Student Debt Relief Scam

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A 47-year-old woman from California was arrested on Tuesday for allegedly being the mastermind behind a nationwide student loan debt relief scheme that netted more than $6 million.

Angela Kathryn Mirabella was one of the seven people apprehended for various charges, including conspiracy to commit grand theft and unauthorized use of personal identifying information. She is being held without bail and scheduled to be arraigned today.

Prosecutors said the suspect victimized more than 19,000 students over three years with the promise of reducing or eliminating their student loan debts.

“When borrowers became suspicious or unsure, these sales agents would allegedly apply the pressure creating fake deadlines and imply there was no other way to get student loan forgiveness,” California Attorney General Rob Bonta explained, as quoted by the Associated Press.

Part of the scheme was to obtain the personal information of students to be used in accessing and making changes to the Federal Student Aid accounts of borrowers without their permission.

Other Parts of the Scheme

Between 2017 and 2020, four call center managers and two sales agents in addition to Mirabella contacted 380,000 student loan borrowers struggling to pay their debts.

The agents pretended to work for the US Department of Education and promised to enroll them in a program that would lower their monthly payments and could later forgive their loans.

To be part of the fraudulent program, students had to pay fees and additional monthly charges costing more than $1,000 for the services of the fake agents.

Bonta revealed that most of the victims thought the extra charges being asked from them were used to pay their loan debts. “This led many of the victims to stop making their monthly payments on their actual student loans, which resulted in late payment notifications, increased loan balances and sometimes a complete student loan default,” he said.

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