Search Results: Student Loans

Student Loan Servicer Reaches $8 Million Agreement with DOJ to Resolve False Claims Allegations

On January 14, ​2022, the Department of Justice (DOJ) ​anno​un​ced​ that it reached an agreement ​with a student loan servicer that had serviced loans under the Federal Family Education Loan (FFEL) Program.  The agreement resolves allegations that the loan servicer submitted false claims to the Department of Education (DOE) in violation of the False Claims Act (FCA)​….

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39 State Attorneys General Reach $1.85 Billion Settlement With Student Loan Servicer

On January 13, thirty-nine state Attorneys General announced that they had reached a settlement with a national student loan servicer.  The settlement resolves allegations that, since 2009, the servicer had been steering borrowers into higher-cost, longer-term forbearance arrangements.  The Attorneys General alleged the practices increased borrower loan balances and violated various provisions of each state’s laws. …

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FTC Reaches $500,000 Settlement with Payment Processor for Its Role in Alleged Student Loan Debt Relief Scheme

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On November 8, 2021 the Federal Trade Commission (FTC) announced that it entered into a stipulated order with a payment processor, resolving allegations that the payment processor violated Section 5 of the Federal Trade Commission Act (FTC Act) and the Telemarketing Sales Rule (TSR) ​​​by facilitating payments related to an unlawful student…

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Minnesota AG Announces Approval of $38 Million in Student Loan Debt Relief and Restitution

On September 30, 2021, the Minnesota Attorney General (“Minnesota AG”) announced that a federal bankruptcy court had approved $23.6 million in student debt relief and $15.8 million in restitution for students of two for-profit universities that allegedly engaged in consumer fraud and illegal lending practices. The settlement​, originally announced in March 2021, resolved allegations that the universities misled students…

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DOJ Reaches $50,000 Settlement with NJ Higher Education Student Assistance Authority

​On September 20, 2021, the Department of Justice (DOJ) announced that it rea​ched a settlement with the New Jersey Higher Education Student Assistance Authority (HESAA), resolving allegations that the state agency unlawfully obtained default judgments against two military servicemembers for student loan debt in violation of the Servicemembers Civil Relief Act (SCRA). In a…

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Massachusetts AG Settles with Debt Collector for $2.25 Million

On September 7, 2021, the Massachusetts Attorney General (AG) announced​ that it reached a settlement with a debt collection company, resolving allegations that the company engaged in unfair and deceptive debt collection practices in violation of state law.  In particular, the company is alleged to have (1) initiated more than two…

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CFPB Enters Into Consent Order with Affiliated Education Financing Companies

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​On September 7, 2021, the Consumer Financial Protection Bureau (CFPB) announced that it had entered into a consent order with a group of affiliated education financing companies that provided students with income share agreements (ISAs) to finance postsecondary education.  The consent order resolves allegations that the companies violated ​the Consumer Financial Protection Act (CFPA), Regulation Z…

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California Settles with Student Loan Debt Relief Company for Allegedly Collecting Illegal Fees

​On August 9, 2021, the California Department of Financial Protection and Innovation (DFPI) announced ​that it had entered into a settlement agreement with a Tustin-based student loan d​ebt relief company, resolving allegations that the company violated the California Consumer Financial Protection Law (CCFPL) when it collected illegal advance fees under the Telemarketing Sales Rule (TSR). This settlement comes as the…

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Massachusetts AG Reaches Settlement with Bank to Provide Student Loan Debt Relief

On May 28, 2021, Massachusetts Attorney General Maura Healy (Massachusetts​ AG) announced a settlement with a bank, acting as an agent for lenders, which requires the bank to permanently discharge debts and return payments made by certain former students of a regional for-profit university.  The settlement requires the bank to refund over $30,000 in recent loan repayments made by certain Massachusetts borrowers…

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FTC Settles Claims with Student Loan Debt Relief Companies

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On May 17, 2021, the Federal Trade Commission (FTC) announced​ a settlement​ with several student loan debt relief companies and their respective owners.  The settlement stems from a complaint filed in 2019, in which the FTC alleged the companies charged illegal upfront fees and led consumers to believe the fees​ were going towards consumers’ student loans in violation of Sections…

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California Settles with Online School for Allegedly Deceptive Financing Practices

On April 26, 2021, the California Department of Financial Protection and Innovation (DFPI) announced that it had entered into a settlement agreement with an online coding school, resolving allegations that the school engaged in deceptive acts and practices in violation of California’s new Consumer Financial Protection Law (CCFPL). The school offers its…

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Minnesota AG Announces Settlement with Student Loan Debt Relief Company

On April 13, 2021, the Minnesota Attorney General Office (Minnesota AG) announced that it reached a settlement with a California-based student-loan debt-relief company resolving alleged violations of Minnesota’s Debt Services Settlement Act, Prevention of Consumer Fraud Act, Minn. Stat. § 325F.69, et seq.,​ and Uniform Deceptive Trade Practices Act, Minn. Stat. § 325D.43, et seq. The Minnesota…

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Pennsylvania AG Settles with Student Loan Debt Buyer for $2.6 Million

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On April 6, 2021, the Pennsylvania Attorney General (Pennsylvania AG) announced that it reached an agreement with a Texas-based debt buyer concerning a portfolio of student loan debt it purchased from a now-defunct for-profit college. According to the Pennsylvania AG, the debt purchaser purchased the portfolio of loans after the for-profit college abruptly closed in December 2018 due to…

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Washington State Court Rules that Student Loan Servicer Violated the Washington Consumer Protection Act

On March 5, 2021, the Washington Attorney General’s Office (AG) announced that a Washington State court ruled against a student loan servicer, finding that the servicer violated the Washington Consumer Protection Act by engaging in unfair and deceptive conduct related to its representations related to a “co-signer release” program. The partial summary judgment order…

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California’s DFPI Launches Investigation and First Formal Enforcement Action

On February 3, 2021, California’s Department of Financial Protection and Innovation (DFPI) announced that it has commenced its first formal enforcement action and launched a separate investigation into student loan debt relief companies.  Goodwin previously provided an overview of three new California consumer finance laws that became effective in January 2021,…

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FTC Distributes $1.7 Million to Affected Consumers in Alleged Student Loan Debt Relief Scam

On February 10, 2021, the Federal Trade Commission (FTC) announced that it will begin distributing over $1.7 million to consumers that it claims lost money as a result of an alleged student loan debt relief scheme.  The payments are part of a 2018 settlement with a student debt relief group, previously covered ​by Enforcement Watch, that resolved…

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Massachusetts AG Settles Claims Against Federal Student Loan Servicer

On February 10, 2021, the Massachusetts Attorney General (Massachusetts AG) announced that it reached a settlement with a national federal student loan servicer, resolving allegations that the entity engaged in deceptive acts or practices in violation of state law related to its student loan servicing practices.  In particular, the Massachusetts​ AG alleged…

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California DFPI Files First Enforcement Action Against Student Debt Relief Company

On February 3, 2021, the California Department of Financial Protection and Innovation (DFPI) announced its first formal enforcement action against an Irvine-based student debt relief company.  The DFPI’s action alleges that the company’s student debt relief practices violated the California Consumer Financial Protection Law and Student Loan Servicing Act. According to the DFPI, for over three…

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California DFPI Launches Investigation Into Four Student-Loan Debt-Relief Companies

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On February 4, 2021, the California Department of Financial Protection and Innovation (DFPI) launched an investigation into whether four California-based student-loan debt-relief companies violated the new California Consumer Financial Protection Law (CCFPL) and Student Loan Servicing Act (SLSA).  The CCFPL took effect on January 1, 2021 and expanded the DFPI’s regulatory…

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