Consumer Finance Insights
June 21, 2017

For-Profit Student Loan Consolidator Reaches Consent Order with State of New Jersey

​On June 16, 2017, the New Jersey Office of the Attorney General (“New Jersey AG”) and the New Jersey Division of Consumer Affairs announced a settlement with a for-profit student loan consolidation service that allegedly operated in the State of New Jersey without a debt-adjuster license.  The New Jersey AG brought the action alleging a violation of the New Jersey Consumer Fraud Act, N.J.S.A. 56:8-1 et seq.  In New Jersey, only certain non-profit companies are permitted to act as debt adjusters under the Debt Adjustment and Credit Counseling Act, N.J.S.A. 17:16G-1 et seq.  For-profit companies cannot obtain a license.​

Under the consent order, the company agreed to cease operations in the State of New Jersey and to pay restitution of $119,606 to affected customers in the state. The restitution reimburses 95 customers who paid the company initial setup fees and monthly service charges to consolidate their loans through the U.S. Department of Education and to recertify their information​ for income-based repayment plans.