DENVER (CBS4) – Hundreds of thousands of Coloradans are trying to pay off their student loans and a high-profile, private loan servicer is under investigation. Colorado Attorney General Phil Weiser joined 31 other state attorneys general in protecting states’ rights to protect consumers against these companies.
“People who have student debt, it’s like having a second mortgage, in some cases, even more,” said Weiser.
Weiser said more than half of Colorado students will graduate with student loan debt, averaging $26,530 per student.
“If you get a good education, that debt is an investment in your future and we need to make sure that debt doesn’t multiply and doesn’t cripple you,” said Weiser.
Although the Federal government now holds all student debt, private companies are hired to service that debt. Some of those companies are accused of taking advantage of borrowers.
“We want Navient and other loan servicers to know if you are playing games, if you are misleading consumers, if you are pushing to plans that are bad for them, telling them that they’re good, we can come after you.”
In May, Colorado enacted the Student Loan Servicers Act. It requires student loan servicing companies to be licensed through the state, making them subject to state consumer protection laws, including misleading borrowers.
The new law created a watchdog office under the State Attorney General for receiving and investigating complaints against these private loan servicers.
“We’re going to go after those companies that lie to people, take advantage of people, but the best protection for consumers is to do your homework on the front end.”
The bipartisan coalition of attorneys general filed the amicus brief in the U.S. Court of Appeals for the Third Circuit, in support of a current case against Navient by the Commonwealth of Pennsylvania.