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Federal regulators ordered Student Aid Institute to shut down in 2016, accusing the company of illegally charging upfront fees to thousands of student loan debtors.
Enforcement actions: The company was ordered to close, pay a $50,000 fine and refund a portion of its revenue to consumers.
Over several years, Student Aid Institute enrolled more than 4,000 people with student loan debt in free federal debt relief programs but charged them hundreds of dollars in upfront fees and a $39 monthly fee to do so, the Consumer Financial Protection Bureau said. The company collected roughly $3.6 million from customers.
The company also deceived consumers by implying it was affiliated with the Department of Education and that they were pre-approved and eligible for certain debt-relief programs without knowing whether that was true, the CFPB said.
The company consented to the order without “admitting or denying any of the findings of fact,” the CFPB order says.
Student Aid Institute was also hit with a California state tax lien in 2015 for more than $24,000, state records show.
What the company claims to provide: Student loan debt relief
Based: San Diego
Management: Mckenzie Lamont, president; Steven Lamont, CEO
Sources: California business records, California tax lien records, Consumer Financial Protection Bureau