With a high-profile lawsuit launched against the nation’s largest servicer of student loans, state Attorney General Bob Ferguson says student debt has become his office’s biggest issue.
He vaulted into the public’s eye in January when he challenged President Donald Trump’s travel ban, but Washington Attorney General Bob Ferguson says student debt is the issue that’s taken center stage in his office these days.
In January, Ferguson and the Illinois attorney general both filed lawsuits against Navient, the nation’s largest servicer of student loans, alleging the company used deceptive, unfair and predatory lending practices in loaning billions of dollars to students between 2000 and 2009.
This legislative session, Ferguson’s office successfully pushed a new bill, expected to be signed into law, that will require colleges and universities to help students keep track of how much they owe in student loans.
His office says it has recovered more than $1 million in the last year in cases that involve student-loan debt adjusters preying on borrowers. About 1,600 students have received, or will receive, a full refund of the fees they paid to the debt adjusters, and 15 debt adjusters who broke the state law are no longer able to conduct business in Washington.
In January, Ferguson’s office published an online student-loan survival guide, and on Saturday, it will hold a free public seminar to help students having trouble with student- loan debt. The session will be from 2 to 4:30 p.m. in the Seattle Central Library; registration is not required.
With more and more people borrowing money to cover the rising costs of college, Ferguson said, there are more companies preying on them.
”The scope and scale of the problem has become more evident in the past few years — the amount of student loans, the adverse impact it has on them (borrowers), the unfair way in which Washington state residents with student loans are being treated,” he said.
The lawsuit follows an investigation conducted by Ferguson’s office, the Illinois AG office and the federal Consumer Financial Protection Bureau. It accuses Navient of unfairly pushing expensive, high-interest-rate loans on borrowers who had little chance of repaying them.
Ferguson’s office said it has logged more than 450 consumer complaints involving Navient, significantly more than any other student-loan servicer. Navient collects payments from about 12 million people nationwide, or one in four student-loan borrowers.
Navient has called the lawsuits politically motivated. In a statement, the company says it has helped eligible borrowers enroll in income-driven repayment programs, has made private loans available to students who otherwise would not have been able to attend college, and has gone above and beyond Department of Education disclosure requirements.
Meanwhile, the Trump administration is taking steps toward changing the rules that govern the student-loan business. Earlier this month, Department of Education Secretary Betsy DeVos undercut student-loan protections that were put in place during the Obama administration. Devos said she was rescinding the rules to “demonstrate sound fiscal stewardship of public dollars” and to limit the cost to taxpayers.
Ferguson called the regulations “common-sense protections that save borrowers money. Why the new administration wants to roll those back is beyond me.”
He said he couldn’t say whether there’s anything the state can do to push back on DeVos’s decision.
“We’re obviously watching it very closely,” he said. “I’m deeply concerned.”