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Press Release

Wednesday, July 1, 2015

Attorney General Lori Swanson Files Lawsuit Against Company Promising Student Loan Debt "Forgiveness"

Company charged fees of up to $1,500 for filling out and submitting forms to the federal government for loan repayment and consolidation programs, which eligible borrowers can apply for on their own for free

Attorney General Lori Swanson today filed a lawsuit against Student Aid Center, Inc., a Florida company that promised to help borrowers get their student loans “forgiven.” The company charged people as much as $1,500 for enrolling them in repayment plans or consolidation loans that all eligible federal student loan borrowers can apply for on their own for free through the United States Department of Education.

“The cost of college has risen over 1,000 percent in the last 30 years. A record-high 40 million people owe money on a student loan. Some companies exploit this by charging upwards of $1,000 to enroll borrowers in federal repayment programs that people can apply to for free on their own,” said Attorney General Lori Swanson.

In recent years, many “student loan assistance companies” have formed to take advantage of the unprecedented levels of student loan debt:

At the same time, many graduates have faced a bleak employment market:

Student Aid Center entices borrowers with promises that it can immediately qualify them for loan forgiveness, such as: “GET STUDENT LOAN FORGIVENESS NOW!”; “Get Rid of Student Loan Debt!”; “Get Your Student Loans Forgiven Now!”; and “Say Good-Bye to Student Loan Debt.”

Student Aid Center charges borrowers $500 to $1,500 to sign them up with the United States Department of Education for repayment plans or consolidation loans which the borrower can apply for on their own for free. In addition to baiting borrowers with promises of loan forgiveness, to get borrowers to sign up, the company has:

The lawsuit against Student Aid Center was filed in Hennepin County District Court and seeks injunctive relief and restitution.

The Attorney General’s Office issued a warning today entitled Beware of Student Loan Assistance Companies that Charge High Fees for What You Can Do for Free. Student loan borrowers may access the United States Department of Education’s website—www.studentaid.ed.gov/sa/repay-loans—to access information about federal student loan repayment programs available to all eligible borrowers for free.

People may report complaints about Student Aid Center or other student loan assistance companies by calling the Attorney General’s Office at (651) 296-3353 or 1-800-657-3787, or file a complaint by downloading a Complaint Form from the Attorney General’s website at www.ag.state.mn.us or write to the Attorney General’s Office at: 445 Minnesota Street, 1400 Bremer Tower, St. Paul, MN 55101-2131.