Company reaches $9M settlement with state over student loans
ALBANY, N.Y. (AP) — New York state officials say they’ve reached a $9 million settlement with a federal student loan servicing company accused of harmful practices.
Attorney General Letitia James and Financial Services Superintendent Maria Vullo announced Friday the settlement was reached with ACS Education Services, known as Conduent Education Services.
Officials say the company violated federal and state laws by steering struggling borrowers into temporary pauses in loan payments instead of directing them to income-based repayment programs.
Conduent will pay a $1 million fine and $8 million in restitution to about 55,000 New Yorkers impacted by the company’s practices.
Officials say most eligible borrowers will receive between $100 and $450.
The Florham Park, New Jersey-based company left the student loan business in October and says it’s “pleased” to put the issues behind it.