NEW YORK (MainStreet) — Debt relief companies that prey on under water borrowers aren't new. But companies that have discovered student loans are carving out a growing niche. Now state attorneys general are trying to ride herd on this debt relief land rush.

Last week Illinois Attorney General Lisa Madigan sued five of these companies who broke state law by demanding their fees upfront--as much as $1,250. None of the fees were applied to student loan balances.

The five debt relief agencies were identified as Consumer Financial Resources LLC, operating as Student Loan Resolve; Federal Student Loan Alliance; Interactiv Education LLC, operating as Direct Student Aid; Student Consulting Group Inc., also known as University of One and Help Assist Me Default Resolution Services; and Chicago-based Nationwide Student Aid LLC.

Madigan also announced the creation of a new help line for Illinois residents seeking guidance on coping with student-loan debt for Illinois (800-455-2456). Flexible and affordable repayment options might be available to borrowers, depending on the type of student loan they have, according to information distributed by Madigan's office.

The Illinois lawsuits, among other things, are trying to get the companies to repay consumers who used their services. It was not clear that a plan had been put in place to make good on refunds.

Madigan said she has seen similar debt-relief offers for people behind on their mortgages or credit-card payments, but she said consumers struggling with growing student-loan debts are becoming an easier and fast-growing target.

"You should never have pay for help with your student loans," said Maggie Thompson, campaign manager for the Washington, D.C.-based student organization. "But that doesn't make the current process any less confusing. That's why several of our campaign partners have come together to make sure you know the free options out there." It was not clear who would staff the hotline, either the web- or phone-based iteration or what training counselors would receive--an issue with call center and web-based customer service reps in nearly every industry.

The a sign-up screen, a request for borrower information and buttons for "Repayment Options," such Student Loan Default, Loan Discharge and others, plus a list of documents needed during a consultation.

It's not clear who funds the operation, but it is in start-up mode. The website states that the hotline will only be operated “for a limited time” and, perhaps in anticipation of a deluge, "can only handle a certain number of callers." It promises to try to provide assistance to everyone who reaches out, but it also notes it cannot promise that every caller will be connected to a live operator. Volunteer operators will not be available for follow up conversations. The Website states that legal or financial advice is not being offered.

The last line on the home page includes a link to fee charging services.

--Written by John Sandman for MainStreet