October 08, 2016
Over the past few years, dozens of borrowers have written devastating reviews of the New Jersey state agency whose student loans, as we have detailed, have strikingly onerous terms.
"This place doesn't even deserve one star," posted Ashante Patterson on Google's review platform. "It is a scam and horrendous organization that preys on and belittles borrowers."
"You are better off not going to college," wrote another reviewer, Nik Sharma, about the Higher Education Student Assistance Authority, also known as HESAA. "They are the absolute worst and are inhumane."
"Robbery, simply said," critiqued Dane Gruenebaum, another borrower from HESAA. "They operate under the guise of the state, but use private funds."
But recently, the reviews have gone from scathing to raving.
Over the past three weeks, the state agency has received about 140 glowing five-star reviews, in sharp contrast to the earlier online rebukes.
What changed? Not much, except that the agency began to offer gifts to students in exchange for reviews.
An agency official recently wrote to students asking them to post Google reviews "so that our State Legislature and our New Jersey families see the benefits of this great program."
"Email me back with a print screen of your shared verifiable posting so I can send you the 4 gigabyte HESAA flash drive," wrote Andre Maglione, the agency's "acting director of client services."
Giving away gifts in return for reviews is widely considered to be a questionable practice, and indeed is a violation of Google's policies.
According to the company's guidelines, users should never "offer or accept money, products, or services to write reviews for a business," stressing that honest and unbiased reviews are the most valuable to consumers.
"All of the positive reviews here are fake. It's sad that HESAA conceals how terrible they are this way. Avoid HESAA like the plague." – Dan Fitzgerald, writing an online review
"We have a policy against conflict of interest in reviews," said Mara Harris, a Google spokeswoman. She did not comment specifically on the agency's reviews, but urged users to flag any reviews that violate guidelines so that the company could remove them from their platform.
In recent years, the Federal Trade Commission has bolstered its regulation of online endorsements. The agency doesn't ban "incentivized reviews," but it does require that "the incentive is clearly and conspicuously disclosed in the review," said Mary Engle, director of the FTC's division of advertising practices.
In February 2015, the commission sanctioned a car shipment broker for touting reviews from consumers who didn't disclose that they had received discounts in exchange for reviews.
This past March, the FTC reached a settlement with department store Lord & Taylor's after the retailer paid fashion "influencers" to post photos on Instagram while wearing a free dress from the store without revealing their financial incentive.
New Jersey's student loan agency never told reviewers they were required to disclose the incentives. None of the student reviewers revealed that they had received a gift in exchange for a shining write-up.
Bonnie Patten, executive director of nonprofit consumer group Truth In Advertising, told ProPublica that the state agency's scheme may violate federal regulations.
"At a minimum, you're dealing with a deceptive advertisement and endorsement because they failed to disclose clearly and conspicuously material information that would be important to other consumers," said Patten. "Other students are going to look at these reviews and make major decisions based on these reviews."
The agency did not respond to questions about why it did not tell students to disclose the flash drive giveaway in reviews.
Jennifer Azzarano, the agency's communications director, said in an emailed response to our questions that the giveaway was just a "small part of a much larger, ongoing effort to build awareness of the early availability of FAFSA," the official application for federal student aid. But in the "giveaway" emails students shared with ProPublica, the agency does not mention the federal application for student aid.
Azzarano said everyone who reviewed the agency received a flash drive with a reminder to file their federal application for student aid.
"A thumb drive was provided no matter how a reviewer responded," said Azzarano. When asked whether giving free flash drives might encourage positive reviews, Azzarano said that it would not. (Read the agency's full response to our questions.)
Donita Crudup, a student at Thomas Edison State University, had never posted an online review before the agency notified her of the flash drive giveaway. She had received a tuition grant from the state – part of a $385 million program that is also administered by the loan agency – and thought that perhaps the state just needed some help encouraging other students to apply for the grants, also known as TAG.
"Who can say no to free money?" Crudup posted online, giving the agency five stars.
Crudup didn't realize the agency was also responsible for administering a controversial private student loan program that, over the years, had left a number of families financially ruined – and racked up dozens of cautionary online reviews.
The agency only requested reviews from students who received the need-based tuition grants, which a third of full-time undergrads at New Jersey schools receive. Students who received loans from the agency were not emailed about the giveaway.
"I thought it was really messed up in retrospect. After reading that they have so many bad reviews, I don't want to overshadow these real reviews." – Donita Crudup, who gave a five-star review to HESAA
In July, an investigation by ProPublica and the New York Times found that the agency's loans come with rigid terms and aggressive collection practices.
The state's loans have higher interest rates than similar federal programs and limited repayment options for those who struggle to pay. The agency can garnish wages, take tax refunds and suspend professional licenses, all without obtaining a court judgment. And unlike federal and many other state-based programs, the loans are not forgiven after a borrower dies.
The New Jersey agency has defended its practices as necessary in order to fulfill its fiduciary responsibility to the bondholders that fund the state's student loan program. (Read the agency's responses to our previous questions.)
Following the onslaught of five-star posts, one reviewer noticed something was amiss.
"All of the positive reviews here are fake," wrote Dan Fitzgerald. "It's sad that HESAA conceals how terrible they are this way. Avoid HESAA like the plague."
After Crudup posted her review, she did some research about the agency, and discovered that her favorable post contrasted with the agency's previous reviews, many of them from distressed student borrowers.
"I thought it was really messed up in retrospect," Crudup told ProPublica, who now regrets posting her positive review of the agency. "After reading that they have so many bad reviews, I don't want to overshadow these real reviews."
A few days after her post, Crudup received a small package from the agency. Tucked inside was an orange, four-gigabyte flash drive.
"It was totally not worth it given all the information that I learned after," said Crudup, who said she is considering taking down her review.
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