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Feds go to bat for Pennsylvania loan agency

Debra Erdley
| Wednesday, Jan. 10, 2018, 6:18 p.m.

The federal government went to bat for the Pennsylvania Higher Education Assistance Agency Wednesday in a Massachusetts court.

Reuters reported that the U.S. Justice Department filed a petition there arguing that states lack standing to sue contractors such as PHEAA.

The petition came as PHEAA, the Pennsylvania agency that services nearly 25 percent of the nation's student debt, argued that a judge should dismiss the suit Massachusetts Attorney General Maura Healy filed against it last summer.

Healy sued the agency that collects student debts under contract to the U.S. Department of Education. Her suit claims PHEAA mismanaged collections on two loan student programs so badly that some who were paying off student loans were losing out on a program that promised loan forgiveness to those in public service work after 10 years of payments.

Healey's lawsuit charges that PHEAA prevented borrowers from making qualifying monthly payments that count toward loan forgiveness and also overcharged students.

A Suffolk County Court in Boston is hearing the case.

Debra Erdley is a Tribune-Review staff writer. Reach her at 412-320-7996 or or via Twitter @deberdley_trib

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