NEW YORK (PIX11) — New York Attorney General Letitia James announced an agreement was made with the Pennsylvania Higher Education Assistance Agency, which will help thousands of New York loan borrowers.
The PHEAA has been required to audit thousands of accounts to identify errors that may have caused borrowers to miss out on benefits, such as income-driven repayment plans or debt forgiveness for eligible borrowers under the Public Service Loan Forgiveness program as part of an agreement with the Office of the Attorney General, according to a statement by James’ office released on Wednesday.
The agreement followed a lawsuit that was brought against the student loan provider over allegations of inaccurately counting loan payments, improperly denying applications and failing to process applications in a timely manner.
“Negligent student loan servicers like PHEAA left countless students buried in debt and contributed to the national student debt crisis,” James said in a statement. “Today’s agreement will correct years of mismanagement by PHEAA and put borrowers on a path to finally being debt-free.”
James’ office said PHEAA will automatically review the accounts of nearly 10,000 New York borrowers for potential errors, including incorrect information provided about PSLF or income-driven repayment eligibility and inaccurate monthly payments that borrowers were charged, among others.
While PHEAA has announced that it will stop serving federal student loans when its current contract with the U.S. Department of Education ends in December 2022, it has committed to taking the necessary actions demanded by the agreement with the Attorney General’s office.