U.S. Government Acquires FAFSA Website That Was Confusing Students (UPDATE)

Student Financial Aid Services is transferring FAFSA.com to the Department of Education.

The federal government has been taking down websites that host illegal activity for years, but in taking over a website -- specifically, FAFSA.com, which until recently had been operated by the company Student Financial Aid Services, Inc. -- the Department of Education is doing something unusual.

FAFSA is the Free Application for Federal Student Aid, which millions of prospective college students fill out every year. SFAS, a private company based in California, had been offering to help prospective students complete their FAFSA applications for a fee.

“Students and families applying for federal student aid shouldn’t have any confusion about whether they’re on the official FAFSA website or a commercial website,” said Secretary of Education Arne Duncan in a statement Thursday. “This transfer will help provide clarity for parents and students.”

SFAS announced its intention to transfer FAFSA.com to the U.S. Department of Education on July 13. The action is separate from a complaint filed Thursday in which the Consumer Financial Protection Bureau alleges that SFAS had misled consumers about the cost of its services and billed them with undisclosed, unauthorized recurring charges.

“Student Financial Aid Services, Inc. made millions of dollars at the expense of consumers through its illegal recurring payment scheme,” said CFPB Director Richard Cordray in a statement Thursday regarding the legal action against Student Financial Aid Services. “Our enforcement action will put money back in the pockets of consumers who were misled while seeking to access federal student aid.”

The Department of Education elaborated on its plans in a statement Friday morning.

"The Department has been in direct negotiations with this company to eliminate points of possible confusion for students or parents," said spokesman Matt Lehrich. "To that end, in May 2014, the Department received the official federal registration for the mark FAFSA® from the U.S. Patent and Trademark Office, and this month the company agreed to transfer the domain."

"The Department, upon obtaining the FAFSA.com domain, will host -- during a transition period -- a splash page that provides clear and unambiguous direction to navigate either to FAFSA.gov to fill out a Free Application for Federal Student Aid (FAFSA) or to SFAS.com to access SFAS's fee-based financial aid assistance and FAFSA preparation services that were previously hosted at FAFSA.com," Lehrich continued.

The transition isn't 100 percent complete yet. For now, visitors to FAFSA.com will simply see a page with a link to fafsa.ed.gov and a place for existing FAFSA.com customers to log in. Lehrich noted that the Education Department will host the existing site for six months, after which FAFSA.com will redirect to FAFSA.gov.

The federal government has taken control of a commercial website because of consumer confusion at least once before. "It happened a few years ago with GIBill.com," Michael Stratford, a reporter for Inside Higher Ed, said in an email. "I wrote about it at the time for The Chronicle of Higher Education. (And my current employer, Inside Higher Ed, covered it as well.)"

CORRECTION: An earlier version of this story said the CFPB was seizing FAFSA.com, similarly to how the government seizes land by eminent domain. In fact, the transfer of the domain name FAFSA.com from SFAS to the Department of Education was voluntary. An earlier version of this story also said the domain name transfer was part of CFPB's legal action against SFAS. It is unrelated. We regret the errors.

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