LITTLE ROCK, Ark. (KTHV) - New developments in a story we’ve been looking in to for a while: Student loan debt. It affects tens of millions of Americans, and many end up seeking help to pay off their growing debt.

A federal agency is now accusing one of the companies people turn to for help of operating a “debt relief operation” that's cheating thousands of people.

It was a promise to help people escape student loan debt, but instead, it led to a huge lawsuit.

"If it seems too good to be true, it probably is. I'm out about $1,000,” James Flanagan, who is engaged to a THV11 employee, said.

He fell victim to what the Federal Trade Commission is calling a "deceptive student loan debt relief scam."

"'We could save you probably close to $5,000.' I thought that would be awesome, but the thing was, I needed to pay them $108 a month on top of any part of my student loan I still needed to pay," Flanagan said.

Over the course of a year, Flanagan paid Ameritech Financial every month to help him lower his student loan payment. What he didn't know, is that service is free through the US Department of Education and many loan servicers.

"They were just middle manning. They were just pocketing $108 a month out of my account,” Flanagan said.

He found out what they were up to after the FTC charged Ameritech with using deceptive means to pinch more than $28 million from thousands of borrowers across the country.

"I probably would only have about 10-15 months on my student loan, but now instead, I have two years," he said.

"This is a consistent issue in our office,” said Tony Williams, the Director of the Arkansas Student Loan Authority. Often, when people realize what they've fallen prey to, they reach out to his office for help.

"We often have to tell students they're out of luck,” Williams said.

He said while it may not be immediately obvious to borrowers, often times they're signing agreements that do not guarantee the company will be able to save them any money, meaning there's little that can be done legally.

"To charge these student loan borrowers several hundred dollars, in a situation where the service should be free, it is unethical,” Williams said.

Flanagan, a groom-to-be, said that money could have been spent on his upcoming wedding or planning his future. Instead, he's waiting to see what comes of the FTC's suit against Ameritech, to see if he will ever get his money back.

"A false promise to someone who is already indebted thousands of dollars is just kicking a person while they're down,” he said.

Both men say, if you get one of these offers in your mailbox or inbox, ignore them.

Ameritech Financial did not respond to my request for comment, however on their website, they now have an obvious disclaimer and the following statement on their homepage:

We disagree fervently with the unfounded allegations in the FTC's complaint and look forward to vindication in court. And, as always, we remain dedicated to transparency with our customers to ensure they receive the best service possible.