More Than 19,000 People 'Swindled' in Alleged $6 Million Student Loan Debt Scam

California Attorney General Rob Bonta said the leader of a suspected student loan debt relief scam was arrested after allegedly defrauding more than 19,000 people in California and across the country.

The alleged scam was "one of the nation's largest" of its kind, Bonta's office said in a Tuesday news release. The suspected leader of the scheme worked with six other individuals to steal more than $6,130,000 from thousands of student loan borrowers between 2017 and 2020, according to Bonta's office.

"Our students worked hard to achieve their college dreams, but for some their dreams have become horrific nightmares," Bonta said during a Tuesday news conference, The Los Angeles Times reported. "They were swindled; they were scammed."

The suspected scam leader was identified as Angela Mirabella in an indictment shared by Bonta's office. A grand jury indicted Mirabella and six others in connection with the alleged scam earlier this month.

Mirabella owned businesses specializing in third-party debt relief in Southern California that "employed managers and sales agents to operate multiple call centers," according to Bonta's office. Those call centers allegedly reached out to student loan borrowers in California and throughout the U.S. with false promises to help those borrowers tackle their student loan debts, he said.

An estimated 380,000 student loan borrowers were contacted by call centers associated with Mirabella during the years the alleged scheme was active, Bonta's office said. At least 3,000 of the more than 19,000 student loan borrowers impacted by the alleged scam were from California, he said.

"These agents allegedly feigned an association with the U.S. Department of Education and, without authority to do so, guaranteed borrowers enrollment in programs that would lower their monthly payments and result in loan forgiveness," the state attorney general's press release said.

Call recipients who exhibited uncertainty were pressured by the callers who led the borrowers to believe "that their company was the only way to enroll in these plans and that their offers only applied for a limited time," the release added.

Bonta encouraged student loan borrowers to visit the U.S. Department of Education's federal student aid website for information about how to detect and avoid scams. The webpage devoted to scam prevention says student loan borrowers "never have to pay for help with your federal financial aid or student loans."

Bonta's office said the Orange County Sheriff's Department contributed to the investigation into the alleged scam, as did the U.S. Postal Inspection Service and Office of the Inspector General for the U.S. Department of Education.

In the release from Bonta's office, Tom Harper Jr., the special agent in charge of the Technology Crimes Division of the education department's Office of Inspector General, said the investigation into the suspected scheme "should serve as a warning" and added scammers targeting student loan borrowers "will be caught and held accountable for your criminal actions."

Newsweek reached out to the U.S. Department of Education for comment and will update this article with any response.