Click here to subscribe today or Login.
HARRISBURG — Pennsylvania Attorney General Josh Shapiro — working with the Federal Trade Commission and 11 other Attorneys General across the country — announced Friday a coordinated federal-state initiative targeting student loan debt-relief scams, a press release says.
The crackdown is targeting scammers who used false promises of debt relief to take more than $95 million in illegal upfront fees, according to Shapiro’s office.
Pennsylvanians collectively owed $61.8 billion in private and federal student loans as of December 2016. The average student loan debt for Pennsylvania college graduates in 2016 was $35,759 – the second highest in the country. Student loan debt affects more than 44 million Americans and, with balances of more than $1.4 trillion, student loans are the second largest segment of U.S. debt after mortgages.
“Pennsylvania is ground zero when it comes to student loan debt, and we have a responsibility to protect our students and families from false or deceptive practices,” Shapiro said in the release. “Consumers should remember: Only scammers promise fast loan forgiveness. Consumers should never pay upfront fees for help. If you think you’re being scammed, I want to hear from you. We’re here to help protect you from scam artists preying on your hopes and dreams to obtain higher education.”
Those who believe they’ve been scammed should call the Bureau of Consumer Protection at 1-800-441-2555 or send an email to [email protected].
Earlier this month, the AG’s Bureau of Consumer Protection sued Student Loan Relief LLC, a Texas company which allegedly engaged in deceptive acts targeting Pennsylvania consumers with student loan debt.
Student Loan Relief targeted 66 Pennsylvania consumers by falsely promising they would reduce their loan payments or eliminate some of their debt through enrollment in forgiveness programs or income-driven repayment plans, according to the release.
As a result of Student Loan Relief’s deceptive conduct, these consumers now owe more on their student loans.
To date, state investigators have developed restitution claims totaling $60,482, and that amount is expected to rise.
“Whether it’s standing up for 66 borrowers who were scammed, or filing a lawsuit last week on behalf of tens of thousands of Pennsylvanians and millions of Americans against the largest federal student loan provider in the country, my office will fight every day to protect students and families from predatory loan practices that leave them saddled with debt,” Shapiro said.
The recent lawsuit he was referring to involved Navient Corp. and subsidiary Navient Solutions LLC. Shapiro accused them of selling “risky and expensive” subprime loans and failing to perform loan servicing.
Navient has a student loan servicing center in Hanover Township with about 1,000 employees.