Student Loan Debt Companies Under Investigation: Minnesota Attorney General to Probe 52 for State Law Violations

The Minnesota Attorney General’s Office is initiating an investigation into 52 student loan debt companies, suspected of violating state law. Attorney General Keith Ellison announced this inquiry earlier this week, a few days after interest on student loans started accruing again. Student loan payments were temporarily halted for over three years as a result of the COVID-19 pandemic.

Student Loan Debt Companies Under Investigation. (Photo: KSTP)

Minnesota Attorney General Investigates 52 Student Loan Debt Companies

According to MPR NEWS, the Minnesota Attorney General’s Office has launched an investigation into 52 student loan debt companies suspected of violating state law. Attorney General Keith Ellison initiated the inquiry earlier this week, shortly after interest on student loans began accruing again following a pause of more than three years due to the COVID-19 pandemic.

Many of these 52 companies, predominantly based in California, appear to offer debt-settlement services to consumers in Minnesota without complying with the state’s registration requirements. According to the Attorney General’s office, these student loan debt companies are allegedly in breach of consumer protection laws. They stand accused of misrepresenting fees and services and falsely promising student loan forgiveness, a benefit that only the federal government can grant.

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 Student Loan Debt Companies Over Potential Violations: Concerns Over Fraudulent Practices and New Guidance

According to Bring Me The News article, in an effort to combat fraudulent practices in the student loan industry, letters were dispatched to all 52 identified student loan debt companies in Minnesota, requesting details about their operations. The cooperation included the participation of the Federal Student Aid office within the U.S. Department of Education.

Attorney General Ellison emphasized the financial challenges faced by Minnesotans due to high student loan costs and condemned the exploitation of borrowers by unscrupulous student loan debt companies charging excessive fees and making false promises. Ellison’s office has a history of taking action against similar entities.

Minnesotans who have encountered fraudulent activities related to student loan debt companies are encouraged to contact the attorney general’s office through phone numbers provided (651) 296-3353 in the Metro Area or (800) 657-3787 in Greater Minnesota, an online Consumer Assistance Request Form, or by writing to the office’s physical address, Consumer Assistance Request Form online or write to the office at 445 Minnesota St., Suite 1400, Saint Paul MN 55101.

Additionally, Attorney General Ellison has published new guidelines on the official website to inform residents of their rights and responsibilities as student loan payments resume. This initiative aims to empower Minnesota borrowers and protect them from potential scams during this period.

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