New York – New York Attorney General Letitia James, as part of a coalition of 23 attorneys general from around the nation, today took action to address the nation’s ongoing student loan crisis. In a letter to Secretary of Education Dr. Miguel Cardona, Attorney General James and the coalition urge additional reforms to ease the process of paying student loans, as well as to protect student loan borrowers from paying back debt to for-profit and now defunct colleges. Since taking office, in 2019, Attorney General James has returned more than $15.5 million to student loan borrowers.
“With more than $1.7 trillion in student debt owed by students across the country, now is the time for us to take bold action to end this crisis and provide our students with the tools they need to move forward,” said Attorney General James. “We need to make attaining a higher education more accessible and that begins with affordability. Imagine what could be achieved without the heavy burden of student loan debt. I encourage the Biden-Harris Administration to keep all options on the table, including loan cancellation.”
In their letter, the coalition of attorneys general urged Secretary Cardona to consider several policy actions that would help student loan borrowers, including:
- Continuing the policy of suspending student loan payments and waiving interest for as long as necessary to support struggling borrowers;
- Continuing the policy of suspending involuntary collections activities, as well as authorizing suspended payments to count towards both the Public Service Loan Forgiveness Program and income-driven repayment (IDR) plan forgiveness;
- Enacting reforms so that student loan borrowers are able to access and remain in IDR plans to which they are entitled — enabling borrowers to have more affordable monthly payments, to avoid the serious consequences of default, and to secure loan forgiveness when appropriate; and
- Enforcing the gainful employment requirement of the Higher Education Act, which would shield borrowers from for-profit programs that fail to prepare students for careers.
Today’s letter applauded the Department of Education’s actions, just yesterday, to expand pandemic protections to privately-owned loans. The attorneys general also welcomed President Joseph Biden’s commitment to consider using executive authority to cancel student debt, saying “…we strongly urge that any debt cancellation should apply to all federal loans — including Federal Family Education Loans and Perkins loans that are not owned by the Department… For many with student debt, the current system is highly complex and difficult to manage. This is a needless source of great anxiety and is plainly unfair. We can and must do better.”
Today’s letter is the latest action Attorney General James has taken to support student loan borrowers. In July 2020, Attorney General James and a multistate coalition sued the Trump Administration’s U.S. Department of Education and former Education Secretary Betsy DeVos to block their efforts to repeal critical protections for student-borrowers who have been misled or defrauded by predatory for-profit schools.
Additionally, in June 2020, Attorney General James filed a multistate lawsuit to stop the Department of Education and Secretary DeVos from repealing the “Gainful Employment” rule, which provides critical protections to students considering enrolling in for-profit colleges and vocational schools that promise students “gainful employment in a recognized occupation” after graduation.
In January 2019, Attorney General James and the New York state Department of Financial Services obtained a $9 million agreement with a federal student loan servicer, ACS Education Services (currently known as Conduent Education Services), after an investigation revealed that the company had steered borrowers away from income-based repayment plans toward more expensive options.
Finally, Attorney General James helped negotiate two multistate agreements with loan companies — Student CU Connect CUSO in June 2019 and PEAKS in September 2020 — that preyed on ITT Technical Institute students by deceiving them into taking out private student loans. These agreements resulted in $7.5 million in debt relief to nearly 900 New York ITT students.
Joining Attorney General James in sending today’s letter to Secretary Cardona are the attorneys general of California, Colorado, Connecticut, Delaware, Hawaii, Iowa, Illinois, Massachusetts, Maryland, Maine, Minnesota, North Carolina, New Jersey, Nevada, New Mexico, Oregon, Pennsylvania, Virginia, Vermont, Washington, Wisconsin, and the District of Columbia.