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Illinois Sues Debt Companies Preying on Student Loan Borrowers

Texas residents may be interested to learn that the attorney general of Illinois has filed lawsuits against five debt relief companies that prey on people who are behind on their student loan payments. The companies are accused of breaking state law by demanding service fees up front. None of the fees, which totaled as much as $1,250, were applied to the student loan debts.

The debt relief companies named in the lawsuits are Consumer Loan Financial Services LLC, Federal Student Loan Alliance, Interactiv Education LLC, Student Consulting Group Inc. and Nationwide Student Aid LLC. The lawsuits seek to obtain refunds for consumers who paid fees to the companies. The state has also created a new help line for residents who need advice on paying back their student loans.

Companies that offer paid debt relief advice have long preyed upon consumers with mortgage and credit card debt, but they have recently stepped up their efforts to target individuals who are behind on their student loan payments. The Illinois lawsuits are part of a growing effort by state attorneys general nationwide to fight back against the trend. According to experts, consumers should never have to pay for help with their student loan debts.

Consumers who are having difficulty repaying their student loans may wish to seek the advice of an attorney. Legal counsel could go over all the legitimate student loan repayment options available. An attorney could also review a client's other financial challenges, such as credit card debt or unpaid medical bills, and offer guidance on debt elimination and other forms of debt relief.

Have more questions? Contact our Houston bankruptcy lawyer today for answers!

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