A Florida-based company has been contacting ISU students about student loan consolidation claiming to represent the university.

The company, Direct Student Services of Florida, does not represent Iowa State and has made an agreement with the university to cease contacting students, although no legal action is planned on the part of Iowa State.

“We have a commitment from this company that they will stop contacting students,” said Roberta Johnson, director for the Office of Student Financial Aid, adding that the company agreed to stop Thursday.

Johnson said she did not know how many students had been contacted but said calls from concerned students had made up the majority of those placed to the financial aid office over the past two weeks.

She said the company asked for student Social Security numbers and reference information and performed consolidations through U.S. Bank.

“I really want to allay the concerns of students who have done consolidations, because they’re going to U.S. Bank, they should be well served,” Johnson said, adding that she had heard about approximately six students who had consolidated with the company, although more probably have.

She said although the company had implied it was a representative of Iowa State and had been given student information by the Office of the Registrar for the express purpose of loan consolidation, it had carefully worded its messages to students to prevent legal recourse by Iowa State.

In actuality, the company purchased a list of public information – such as names and phone numbers – from the Registrar, Johnson said.

“You can get kind of lost in semantics there,” Johnson said of possible student reactions to the calls.

“I don’t think there’s anything there that allows us to generate any legal action at all.”

Doug Borkowski, counselor at the Financial Counseling Clinic, said most ISU students consolidate loans with Iowa Student Loan Liquidity, a state agency, and consolidate their federal loans with federal agencies.

“[Student loan consolidators] can run from the ones that are reputable and above board to ones that are companies that could be there one day and could be gone the next,” Borkowski said. “When they’re calling over the phone and their first question – or one of their first questions – is, ‘What is your Social Security number?’ that should send up a red flag.”

He said it should not be difficult for students who have already consolidated with Direct Student Services of Florida to re-consolidate with a different group and would simply involve getting a new loan.

Borkowski said loan consolidation is usually something students consider in the spring, as interest rates change every July 1.

“This was kind of an odd time for somebody to be worrying about this issue,” he said, adding the Florida-based company could have been trying to catch students off-guard at a time the issue isn’t generally talked about.

Mike Freeman, CEO for Direct Student Services of Florida, could not be reached for comment.