Attorney General Ellison shuts down fraudulent student-loan debt-settlement company in Minnesota

California-based company offering fraudulent ‘forgiveness’ scheme will pay State more than $18K to refund Minnesota customers

April 13, 2021 (SAINT PAUL) — Minnesota Attorney General Keith Ellison announced today that his office has obtained a settlement that requires a California student-loan debt-relief company that illegally collected fees from customers and misrepresented its services to consumers to cease operating in Minnesota and provide full refunds to its Minnesota consumers.   

Among other things, Capital Student Loan Center — a company based in Stanton, California — is alleged to have falsely promised consumers student-loan forgiveness, when only the federal government can forgive federal student loans.  In reality, the Attorney General alleges that all the company did was enroll consumers in federal repayment programs that consumers can enroll themselves in for free, then pocketed both initial and monthly fees for doing so. It also collected its fees up front before performing the promised services, which is illegal under Minnesota law regulating debt settlement services. Additionally, Capital Student Loan Center was operating without registering as a debt-settlement service provider, as required by Minnesota law.  

The settlement, filed in Ramsey County District Court, requires Capital Student Loan Center to immediately pay the State $18,190.50 — the full amount it has collected from Minnesota customers —  which the Attorney General’s Office will use to provide full restitution to consumers. The settlement also requires Capital Student Loan Center to cease operating in Minnesota unless and until it registers as a debt-settlement service provider.  Attorney General Ellison’s Office alleges in the settlement that Capital Student Loan Center violated Minnesota’s Debt Services Settlement ActPrevention of Consumer Fraud Act, and Uniform Deceptive Trade Practices Act.  

“Minnesotans take out student loans so they can get an education that will help them better afford their lives. When bad actors take advantage of Minnesotans who took out these loans in good faith, we will come after them,” Attorney General Ellison said.  

Student-loan debt-relief companies often charge consumers hundreds or thousands of dollars of illegal upfront fees to enroll 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. Often, these companies deceive consumers into believing that the fees will go toward paying down the consumers’ student-loan debt, when the companies actually pocket the fees.    

Attorney General Ellison encourages anyone who has been victimized by Capital Student Loan Center and wishes to claim payment of their refund to contact the Minnesota Attorney General’s Office by calling (651) 296-3353 (Metro area) or (800) 657-3787 (Greater Minnesota), or by submitting a complaint form on the Attorney General’s website at    

The Attorney General’s Office encourages borrowers to visit its website for additional information on how to avoid student-loan scams, including a publication entitled 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 — — for additional information about federal student-loan repayment programs available to all eligible borrowers for free.