Attorney General Ellison shuts down another deceptive student-loan debt-relief company in Minnesota

California-based company offering fraudulent ‘forgiveness’ scheme will pay State over $179K to refund Minnesota customers

The Minnesota Attorney General’s Office has returned over $1.7 million total to consumers victimized by fraudulent student-loan debt-relief companies

December 12, 2023 (SAINT PAUL) — Minnesota Attorney General Keith Ellison announced today that his office has obtained a settlement with Academic Financial Advisors LLC, d/b/a Alumni Support Center, a California student loan debt relief company that illegally collected fees from customers and misrepresented its services to consumers. The settlement requires Alumni Support Center to cease operating in Minnesota and provide full refunds to its Minnesota consumers.

Alumni Support Center, based out of Orange County, California, is one of the 52 student loan debt relief companies that Attorney General Ellison’s Office announced it is investigating for suspected violations of Minnesota law on September 6, 2023.

The Attorney General alleges that Alumni Support Center collected illegal up-front fees to enroll consumers in federal repayment programs that consumers can enroll themselves in for free. It also charged these fees before performing the promised services, which is illegal under Minnesota law regulating debt settlement services. Additionally, Alumni Support 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 Alumni Support Center to immediately pay the State $179,067.10 — the full amount it has collected from Minnesota customers — which the Attorney General’s Office will use to provide full restitution to consumers. Attorney General Ellison’s Office alleges in the settlement that Alumni Support Center violated Minnesota’s Debt Services Settlement Act, Prevention of Consumer Fraud Act, and Uniform Deceptive Trade Practices Act.

“I have no patience for companies like Alumni Support Center that break the law and rip off students who are just trying to pay back their loans,” said Attorney General Ellison. “Countless Minnesotans have told me about the fear and anxiety they feel because of their student loans, and it is shameful that companies are exploiting that fear to enrich themselves. I am glad that Alumni Support Center will be refunding their Minnesota customers and halting all operations in our state.”

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—which are sometimes unnecessary or inappropriate for the consumers—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.

This settlement marks the sixteenth time the Minnesota Attorney General’s office has shut down a fraudulent student-loan debt-relief company in Minnesota, following others in April 2016, July 2016, October 2016, February 2018, September 2019, October 2019, April 2020, September 2020, January 2021, April 2021, October 2022, November 2022, February 2023, October 2023, and November 2023. In total, the Minnesota Attorney General’s Office has recovered over $1.7 million to return to Minnesota consumers victimized by fraudulent student loan debt settlement companies.

Attorney General Ellison encourages anyone who has been victimized by Alumni Support Center 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 www.ag.state.mn.us/Office/Complaint.asp.

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 — https://studentaid.gov/manage-loans/repayment/plans — for additional information about federal student-loan repayment programs available to all eligible borrowers for free.