Attorney General Phil Weiser joins bipartisan coalition fighting for student borrowers
Sept. 3, 2019 (DENVER, Colo.) – Attorney General Phil Weiser has joined a bipartisan coalition of 32 state attorneys general in defending the states’ ability to enforce state and federal consumer protection laws against student loan servicers. In an amicus brief filed in the U.S. Court of Appeals for the Third Circuit, the attorneys general argue that the case brought by the Commonwealth of Pennsylvania against student loan servicer Navient for exploiting student loan borrowers should be permitted to go forward in the federal courts.
“Many student loan servicers have engaged in a broad range of unfair, deceptive, and abusive practices such as overcharging borrowers and steering them into expensive repayment plans,” said Weiser, whose office is investigating Navient. “The U.S. Department of Education has abandoned students and is shielding companies like Navient from accountability; we in Colorado are going to hold them accountable. I am committed to defending Colorado’s laws that protect students who have crippling debt. The level of student debt and improper student loan servicing is cause for alarm, as it makes it difficult for people to start families, buy homes, or open businesses.”
The 32 state attorneys general argue that states have a substantial interest in protecting their residents from all unfair and deceptive business practices committed by businesses operating within their borders, including federal student loan servicers. Consumer protection is and has always been an area of traditional state enforcement.
Over half of Colorado students graduate with debt, with an average balance of $26,530 per student. There are approximately 734,000 student loan borrowers in the state, and the total student loan debt outstanding for Coloradans is approximately $26.4 billion. Private student loan servicing companies are responsible for collecting payments, facilitating payoff, and otherwise assisting borrowers.
In Colorado, the Student Loan Servicers Act, which was enacted in May of this year, not only requires student loan servicers to be licensed by Colorado’s Uniform Consumer Credit Code (UCCC) Administrator, but also directly prohibits servicers from misleading borrowers. The law also created a Student Loan Ombudsman position within the Colorado Attorney General’s office, which is responsible for enforcing this law and processing complaints about student loan servicers in the state.
Other states joining the amicus brief include: Alaska, California, Connecticut, Delaware, Hawaii, Idaho, Illinois, Indiana, Iowa, Kentucky, Maine, Maryland, Massachusetts, Michigan, Minnesota, Mississippi, Nebraska, Nevada, New Jersey, New Mexico, New York, North Carolina, Oregon, Rhode Island, South Dakota, Tennessee, Vermont, Virginia, Washington, Wisconsin, and the District of Columbia.