Attorney General Josh Shapiro Takes Action to Protect Pennsylvanians with Student Loans

June 14, 2017 | Topic: Consumers

HARRISBURG — Attorney General Josh Shapiro today took legal action to keep in place critical reforms that protect college students from abusive loan practices by for-profit schools and other institutions.

Attorney General Shapiro joined 8 other attorneys general in filing a motion to intervene in a case currently in U.S. District Court for the District of Columbia. The case involves the U.S. Department of Education’s Borrower Defense Regulations, issued by the Obama administration in November to help students avoid default and curtail loan servicer misconduct.

The regulations provide protections for federal student loan borrowers against abusive practices by schools and colleges, including for-profit companies, and assist in enforcing state consumer protection laws.

The regulations at issue allow student loan borrowers to have their debt forgiven if they were victims of deceptive practices by their school or college, such as misrepresenting job placement rates at the school or other abusive practices.

“These reforms were designed to protect consumers after years of abuse in the student loan industry,” Attorney General Shapiro said. “Rolling back student loan protections harms Pennsylvanian college students and their families. We’re taking action to join this lawsuit, enforce the law, and protect students in our Commonwealth.”

The attorneys general filed their motion following recent actions by Education Secretary Betsy DeVos that show the Department is not fully committed to defending the already-finalized regulations, set to become effective July 1st.

According to a letter sent earlier this year to Secretary DeVos by Attorney General Shapiro and 20 other attorneys general, students are struggling under the weight of their student loan debt. In 2015, the Consumer Financial Protection Bureau estimated more than 25 percent of student loan borrowers were delinquent or in default on a student loan.

“Now is exactly the wrong time for the Education Department to roll back on its commitment to protecting students from lenders and schools who break the rules and prey on students for their own profit,” Attorney General Shapiro said.

In addition to Attorney General Shapiro, the motion to intervene in this case has been signed by:

  • Xavier Becerra, California Attorney General
  • Karl Racine, District of Columbia Attorney General
  • Lisa Madigan, Illinois Attorney General
  • Tom Miller, Iowa Attorney General
  • Eric Schneiderman, New York Attorney General
  • Brian E. Frosh, Maryland Attorney General
  • Maura Healey, Massachusetts Attorney General
  • Ellen F. Rosenblum, Oregon Attorney General

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