Millions of Americans have student loans and President Biden has proposed forgiving up to $20,000 of debt per borrower. (Getty Images)
PORTLAND, Ore. (KOIN) – Washington State Attorney General Bob Ferguson announced Tuesday that some student loan borrowers will receive part of the state’s over $2 million in restitution from debt collectors who “preyed” on borrowers.
According to the AG’s office, almost three dozen entities must pay restitution to over 2,600 Washingtonians – giving an average of $755 per consumer.
Ferguson claims the businesses had “unfair and deceptive practices,” including charging up to thousands of dollars in upfront fees, which violates the $25 max under the Debt Adjustment Act.
Additionally, Ferguson’s office says borrowers were charged monthly “monitoring” fees above the legal limit and “without a clear understanding that these fees would span the life of the loan.”
The AG’s office also found the debt adjustors falsely claimed they were associated with the Department of Education, and “aggressively” marketed “student loan forgiveness” for ineligible loans.
Some of the companies falsely claimed they could expedite loan consolidation and claimed to hire student loan “experts” however Ferguson found their staff had no industry experience.
The restitution comes as the federal government restarted student loan payments after a pause during the COVID-19 pandemic.
“It is a chaotic time for millions of borrowers as student loan repayments resume after more than three years,” Ferguson said. “My office is committed to protecting Washingtonians from companies that take advantage of consumers who are simply trying to manage their debt.”
In 2023, similar resolutions were met with Skyway Financial Group, Student Aid Group and Allied Financial.
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