News Column

Madigan Visits SIU Edwardsville to Raise Awareness of Financial Abuse & Scams Targeting Students, Graduates

August 18, 2014



EDWARDSVILLE, Ill., Aug. 18 -- The Illinois Attorney General issued the following news release:

Attorney General Lisa Madigan today visited with representatives of Southern Illinois University at Edwardsville (SIUE) to spread awareness about a number of financial abuses and scams that target current and former higher education students.

Attorney General Madigan's office has seen an increasing number of complaints filed with her office about abuses in student loan debt servicing and scams targeting students struggling to pay off their loans. In response, Madigan is leading the nation in investigating and enforcing consumer protection violations in higher education. Her work includes leading a multistate investigation into Sallie Mae (now Navient) for loan servicing and debt collection abuses, becoming the first state Attorney General to file lawsuits against emerging student loan debt scams, and pursuing investigations and litigation against for-profit colleges for fraudulent marketing practices.

Madigan convened the meeting at SIUE to discuss her work and learn more to inform her efforts to help current and former students facing unprecedented levels of debt to avoid being taken advantage of by loan servicers or con artists preying on borrowers' desperation.

"Student loan debt has reached a scale that makes borrowers prime targets for scams and financial abuse," Madigan said. "It is critical that we work in partnership with leaders in higher education to ensure students are informed about the realities of student loan debt and what their options are so that they can protect their financial security."

Madigan is leading a multistate investigation into the student loan servicer Sallie Mae (now called Navient) for servicing and debt collection abuses. She also is cracking down on a new scam targeting borrowers who are struggling to repay their student loans. Last month, Madigan became the first attorney general in the country to file lawsuits against two companies for charging up to $1,200 upfront for bogus services, including assistance enrolling in a fake "Obama forgiveness program," or help obtaining actual government debt relief services that are already free of charge through the U.S. Department of Education. These scams seek to exploit the nearly 40 million Americans who hold $1.2 trillion in outstanding student loan debt.

Madigan said that student debt problems are increasingly difficult for students who attend for-profit schools. Complaints about for-profit schools make up 50 percent of the higher education-related complaints coming into her office. Students complaining about for-profit schools report that their degrees, which cost thousands and thousands of dollars, often fail to earn them a job in their chosen field. These students also experience a disproportionately higher rate of default on their student loan debt. In the case of national for-profit Westwood College, Madigan filed a lawsuit against the school for engaging in deceptive practices that left Chicago area students with up to $70,000 each in debt for degrees that failed to qualify them for careers in criminal justice.

Madigan's visit to SIUE comes on the heels of her testimony before the U.S. Senate Health Education Labor and Pensions (HELP) Committee on the role of states in higher education. Madigan testified that the lack of information available to borrowers about assistance and repayment options has created an environment ripe for scam operations, which are seeking only to profit off of struggling borrowers. Madigan urged Senators to enact stronger protections under federal law for these borrowers, including:

* Stronger controls over the level of federal funding that for-profit schools receive to ensure those funds are only used to provide students with high quality, affordable higher education that helps them obtain jobs after graduation;

* Uniform standards for student loan servicers to provide struggling borrowers options for repayment;

* A streamlined and accessible system within the U.S. Department of Education to provide information to students about their options and the federal programs that may be able to assist them with repayment; and

* Support for legislation to allow students to refinance their federal loans to take advantage of today's low interest rates, similar to what is already offered to homeowners.

TNS 30FurigayJof-140819-4832438 30FurigayJof


For more stories on investments and markets, please see HispanicBusiness' Finance Channel



Source: Targeted News Service


Story Tools






HispanicBusiness.com Facebook Linkedin Twitter RSS Feed Email Alerts & Newsletters