Washington State Attorney General Obtains Judgment Against Private Student Loan Company Over Illegal Fees

Student Loans

​On August 18, 2015, the Washington State Attorney General’s Office announced​ the entry of summary judgment​ against a regional student loan processing company in a case involving alleged illegal fees charged to borrowers. The company offered student loan modification services, including income-based repayment plans, debt consolidation, and debt forgiveness. According to the Attorney General, the company charged significant fees for these services, even though the same services are offered through the federal government for free. The company also allegedly charged an up-front enrollment fee of $250, more than 10 times the amount permitted under Washington law, and allegedly failed to provide a variety of statutorily-required disclosures to students that received modifications. The Attorney General brought suit under Washington’s Debt Adjusting Act and Consumer Protection Act. The company allegedly committed over 2,700 individual violations, and the Court ordered restitution of all fees paid by Washington residents. The Court will adjudicate the Attorney General’s requests for civil penalties and attorney’s fees in a subsequent proceeding.​​

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