JPMorgan says the college planning company that bought it lied about its size

The JP Morgan Chase & Co. headquarters, the JP Morgan Chase Tower on Park Avenue, Midtown, Manhattan, New York.

Tim Clayton-Corbis | Corbis Sports | Getty Images

Earlier this week, JPMorgan Chase shut down college financial aid platform Frank, which it acquired for $175 million in September 2021, claiming it was misled about the scale of the startup.

Consumers who used the platform may also have been scammed.

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According to JPMorgan, founder of Frank Charlie Javice told the bank that over 4 million students had signed up with the company, which promised to simplify the student loan and grant application process. But when the bank sent out marketing emails to a group of 400,000 Frank customers, around 70% of the messages came back, the bank said in a Lawsuit filed last month in federal court.

Earlier, JPMorgan spokesman Pablo Rodriguez referred a CNBC reporter to his lawsuit against Javice, saying that “any dispute will be resolved through a jury trial.” Javice’s attorney, Alex Spiro, did not respond to an email seeking comment.

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“If it’s too good to be true, it probably is”

FAFSA: Seeking Financial Aid

In response, the FTC sent a dunning letter According to Frank, reference to a number of claims on his website “could unlawfully mislead consumers”. For example, it said consumers could get a cash advance of up to $5,000 on their student loans without being charged interest or fees, although Frank charged a fee of $19.90 per month.

In addition to the problems reported by government officials, higher education expert Mark Kantrowitz noted other questionable claims made by Frank. At one point, the company said it could fill out the Free Individual’s Application for Federal Student Aid (FAFSA) in just four minutes.

According to the US Department of Education, he found that it takes time about an hour for new applicants to fill out the form, which is the main way students apply for financial aid to help them pay for college.

“If it’s too good to be true, it probably is,” Kantrowitz said.

Student loans, financial aid are available at no cost JPMorgan says the college planning company that bought it lied about its size

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