Illinois' attorney general on Monday filed lawsuits against five companies and is accusing them of scamming people who need to repay student loan debt.
Attorney General Lisa Madigan's office said the scammers charge borrowers costly upfront fees with the false promise that their debt will be forgiven or decreased. Madigan also said the scammers will charge for options that are already available to borrowers for free.
"These scams are proof that the rate of student loan debt in this country has skyrocketed, and it has already destabilized the financial security of millions of people across the country," Madigan said. "When people cannot make their loan payments, they don’t get to build the future that they dreamed about when they went to college. We cannot allow these scams to continue."
Madigan said the companies — based in California, Illinois, Florida, Georgia and Texas — violate an Illinois law that bans charging upfront fees for debt settlement services.
The Illinois attorney general's office also has a helpline for borrowers with student loans. It's available at 1-800-455-2456.