Student debt relief company ordered to give refunds, cease business in North Dakota
BISMARCK — North Dakota Attorney General Wayne Stenehjem has ordered Student Loan Services LLC to issue refunds to customers in the state and to stop doing business here.
The California-based student debt relief company is not licensed in North Dakota, and Stenehjem says it may not operate in the state until it is in full compliance with the state’s licensing law. Debt relief companies must be licensed by the North Dakota Department of Financial Institutions and post a bond with the state.
The attorney general’s Consumer Protection Division investigated the company after a woman who had paid the company nearly $900 filed a complaint, saying she had not received services for several months after beginning payments. The company had not taken any steps to reduce her student debt, according to Stenehjem's office.
Student Loan Services, which had contracts with 18 people in North Dakota, has agreed to cancel all those contracts and issue refunds to anyone who makes a request. The company is barred from soliciting new customers in the state until it complies with licensing requirements.
Student debt relief companies charge fees to help reduce or eliminate customers’ loan payments and debts by enrolling customers in federal student relief programs. Nearly all services these companies offer can be done for free.