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August 24, 2017

One of this country's largest student-loan companies is accused of mismanaging a federal program that promises debt forgiveness to people who work in the public or non-profit sector.

Massachusetts is suing the Pennsylvania Higher Education Assistance Agency, which manages more than a quarter of the nation's student loan debt. The agency also runs a federal program offering forgiveness after teachers and other public servants have made monthly payments for ten consecutive years.

In a lawsuit filed Wednesday in Suffolk Superior Court, Massachusetts Attorney General Maura Healey says processing delays have prevented borrowers from making those payments on time, essentially blocking their path to loan forgiveness.

“This company’s actions have jeopardized the financial futures of teachers and public servants,” Healey said in a statement. “These federal programs allow Americans from all backgrounds to dedicate their careers to serving others.”

Healey also says the company overcharged tens of thousands of students across the country.

In a statement, the agency denies Healey's claims, but pledges to work with the federal government to resolve any issues.

Loan Limbo: While For-Profit College Students Wait, Trump Administration Stalls

confronting cost, student debt, higher ed, Maura Healey

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