New York college to cancel $20 million in unpaid loans

State Issues New York Student Lending Debt Collection Enforcement Consumer Finance

On March 2, the New York City mayor announced an agreement with a for-profit college resolving allegations that it violated various provisions of New York consumer protection laws. According to the press release, the New York City Department of Consumer and Worker Protection filed the lawsuit against the defendant in 2018, claiming that it, among other things: (i) collected debts that were not owed; (ii) concealed its identity from former students when collecting debts; and (iii) falsely misrepresented when debts were accrued on official documents. Under the terms of the settlement agreement, the defendant is required to cease collecting outstanding student loans incurred prior to January 2019, which are estimated to be valued at approximately $20 million. The defendant must also pay  $350,000 in restitution, establish polices related to communicating with students about debt owed to the college, and ensure that the statutes of limitation on debt collection are observed.