Wednesday May 22, 2024
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Beshear, AGs Urge Congress To Stop Legislation That Dismantles State Oversight Of Student Loan Industry

Attorney General Andy Beshear and a bipartisan coalition of attorneys general sent a letter urging congress to scrap legislation that would block states from combating fraud and abuse by the student loan industry.

The coalition is advising Congress to remove language from the pending version of the Higher Education Act reauthorization, H.R. 4508, also known as the PROSPER Act that will obstruct state oversight of private companies that initiate, service or collect on student loans.

“In the face of a student loan debt crisis in our country, protecting Kentucky students from predatory loan companies who seek to mislead them is simply the right thing to do,” Beshear said. “Congress must take immediate action and join our coalition in standing up for students.”

In the fourth quarter of 2017, U.S. borrowers owed an estimated $1.38 trillion in federal and private student loans – more than auto loans, credit cards or any other non-mortgage loan category.

The letter also points out in recent years, state attorneys general have investigated significant, far-reaching abuses in the student loan industry and won settlements returning tens of millions of dollars to student borrowers.

In Kentucky, the Office of the Attorney General has helped more than 9,000 students receive more than $25.5 million in restitution, including debt relief, from predatory lenders and for-profit colleges.

Beshear said today’s letter is just the latest action he has taken to protect Kentuckians from a series of acts by the U.S. Department of Education that aim to strip critical protections from millions of students and families repaying student loans.

In October, Beshear and 18 other state attorneys general sent a letter to the U.S. Department of Education, demanding the department stop rolling back vital safeguards for student loan borrowers.

In July 2017, Beshear and 20 other state attorneys general submitted public comments in response to the department’s announcement of intentions to delay large portions of the Borrower Defense Rule, which was designed to hold abusive higher education institutions accountable for cheating students and taxpayers out of billions of dollars in federal loans.

Beshear opposed the department’s efforts to replace the Gainful Employment regulations that empower students to make informed decisions about their education, and protects students from burdensome debt and poor job prospects.

Beshear remains committed to holding for-profit colleges accountable in Kentucky and helping defrauded students.

Students who have been a victim of a for-profit college or predatory loan practices may contact the Office of the Attorney General by phone, 502-696-5300 or by completing an online complaint form.

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