NEW YORK — A coalition of 16 attorneys general has filed an amicus brief relating to Student Loan Servicing Alliance v. Stephen C. Taylor, et al., in which the attorneys general oppose the federal government's efforts to govern abuses by student loan servicers and limit states' roles in protecting students who are victims of servicer misconduct.
In their amicus brief, the coalition, led by New York Attorney General Barbara Underwood, argues that the federal government has not effectively regulated student loan servicers and has ignored the misconduct of servicers who have abused vulnerable borrowers which is why the state's oversight is necessary, the coalition said. In the lawsuit relating to the brief, the Student Loan Servicing Alliance is suing the District of Columbia to prevent enforcement of a D.C. law that regulates student loan servicers, saying it is preempted by federal law, according to Underwood's office.
“Millions of New Yorkers are struggling with billions of dollars in student loan debt – and we should be using every tool to prevent abuse, rather than undermining states’ efforts to protect borrowers,” Underwood said in a statement. “Servicer misconduct only serves to harm hardworking borrowers who were simply trying to pay for their education and repay their debts. We will continue to fight back against all attempts to undermine the states’ role in protecting New Yorkers from predatory or abusive servicer practices.”
According to Underwood's office, the U.S. Department of Justice has filed a "statement of interest" in the case stating student loan servicers' conduct should be governed only by federal law, a reversal of a long-standing federal policy.