NEW YORK (Legal Newsline) – New York has filed suit against Fedloan, a contractor with the U.S. Department of Education for student loans, claiming it has failed to properly administer the Public Service Loan Forgiveness program (PSLF).
New York Attorney General Letitia James filed a complaint Oct. 3 in the U.S. District Court for the Southern District of New York against the Pennsylvania Higher Education Assistance Agency (PHEAA), doing business as Fedloan Servicing and American Education Services alleging violation of Dodd-Frank Act, New York State law and fraud.
The suit states the defendant was a servicer of U.S. Department of Education loans under the Public Service Loan Forgiveness program created by Congress in 2007.
Among the plaintiff's claims against Fedloan is that it failed "to timely and accurately process" applications, repayment plans and recertification, have "lengthy delays in providing detailed payment trackers," and has caused "delay or prevent eligible borrowers from obtaining lower monthly payments that would enable them to avoid delinquency or default."
The plaintiff seeks restitution and damages to New York residents harmed by Fedloan's alleged practices, litigation costs and other just relief.
The plaintiff is represented by Carolyn East, Special Counsel and Sarah Trombley, Assistant Attorney General of The Attorney General of the State of New York's Bureau of Consumer Frauds & Protection.
U.S. District Court for the Southern District of New York case number 1:19-cv-09155