Consumer Finance Insights
December 3, 2015

Massachusetts AG Seeks Cancellation of Thousands of Student Loans

On November 30, the Massachusetts Attorney General (AG) submitted an application to the U.S. Department of Education (DOE) for the immediate discharge of all federal student loans taken out by 7,200 borrowers attending a for-profit college between 2007 and 2015.  The AG asserted that the college violated state law and obtained federal loans from its students without providing educational services.

In its submission to the DOE, the AG stated that federal debt forgiveness is necessary because the institution has declared bankruptcy.  As such, the institution has not made payments on a default judgment that the Consumer Financial Protection Bureau entered against it last month.

This application is part of the Massachusetts AG’s ongoing consumer protection efforts in the for-profit education industry, evidenced by two settlement agreements with student debt relief companies announced late last week.