Student Loan Company Accused of Mismanaging Debt Forgiveness Program
The company, based in Harrisburg, Pa., holds an exclusive contract with the Education Department to service all loans enrolled in the public service loan forgiveness program
and the Teacher Education Assistance for College and Higher Education Grant program, or TEACH, which offers assistance to those who teach in high-need areas.
A growing number of consumer watchdogs and government officials have sounded alarms this year about a raft of apparent problems with the government’s public service loan forgiveness program, which promises qualifying workers — including teachers, librarians, police officers
and doctors and nurses — a break on their federal student loans in return for a decade of full-time service.
The Massachusetts attorney general filed a lawsuit against the Pennsylvania Higher Education Assistance Agency, accusing it
of extensive mistakes in handling two federal student loan forgiveness programs for those who work in public service jobs.
One of the country’s largest servicers of federal student loans has badly mismanaged debt forgiveness programs for public service workers, significantly
raising repayment costs for hundreds of thousands of borrowers, according to a lawsuit filed on Wednesday by the attorney general of Massachusetts.