Colorado sues student loan servicer over violation of state consumer protection laws
Colorado Attorney General Phil Weiser sued the student loan servicer Pennsylvania Higher Education Assistance Agency after it refused to fully comply with state consumer protection laws.
Weiser’s office announced the lawsuit in a release Wednesday, saying the agency is not complying with the state oversight requirements outlined in the Colorado Student Loan Servicers Act.
The agency is the exclusive servicer of the federal Public Service Loan Forgiveness program, created in 2007 to offer student loan forgiveness for those who make payments for 10 years while working in public service.
“Dedicated Colorado public servants such as teachers, firefighters and nurses are entitled to participate in the Public Service Loan Forgiveness program and deserve the protections afforded to them by Colorado law,” Weiser said in a release.
The agency received a Colorado license in 2019; however, it has recently refused to produce requested records to the attorney general’s office regarding its handling of the loan forgiveness program during the COVID-19 pandemic, the lawsuit alleges.
The agency’s implementation of the Public Service Loan Forgiveness program has also been criticized for issues including low approval rates for loan forgiveness and misinformation about what payment plan or loans borrowers need.
The lawsuit, filed in Denver District Court, requests a temporary and permanent injunction that the agency comply with the attorney general’s oversight authority.
Weiser said the agency’s refusal to adhere to state oversight makes it harder to assure it is complying with the law.
“PHEAA must comply with these requirements and we will work to enforce the law and stand up for student borrowers,” Weiser said.


