A court house in North Carolina unrelated to the Student Loan Group case.
A lawsuit filed in North Carolina against The Student Loan Group, a private loan agency based in California, was settled last Monday. The company is now required to pay out nearly $400,000 in refunds to 377 different residents throughout the state.
The lawsuit, which was filed in September 2016, accused The Student Loan Group of illegally taking advance fees from borrowers for debt adjusting services and practicing “unfair and deceptive practices in the marketing, solicitation, and performance of their debt relief services.”
Student borrowers throughout the state will be issued refunds as a result of the settlement, with the most affected areas being Charlotte, Greensboro, Raleigh, Durham, Concord, Winston-Salem, Fayetteville, Statesville, and Cary.
The Student Loan Group did not admit to any wrong doing rather agreed to the settlement “solely for the purpose of voluntarily resolving disputed claims and to avoid the expense and uncertainty of continued litigation…”
A representative from the Student Loan Group did not respond to a request for comment.
The events that took place between The Student Loan Group, its clients, and the courts of North Carolina are reminiscent of a troubling trend in student loans: student loan scams and servicer issues.
While The Student Loan Group is not being outright accused of a scam, they are part of a wave of heightened oversight on various different organizations. Most notably, the CFPB went after Navient, the largest of the student loan servicers in the United States, for allegedly misleading borrowers with faulty information. Just recently, the Consumer Financial Protection Bureau (CFPB) cracked down on an agency known as Student Loan Processing for promising relief for a fee to ultimately never deliver debt relief. The rhetoric from the Student Loan Processing case is more similar to the case mentioned in this story than the issues with Navient.
The relief for a few borrowers in the Tar Heel State comes at as great a time as any. North Carolina has the 13th highest student loan debt per graduate in the nation with students in the state graduating with an average of $14,507. While that might not seem like a large number, some students at North Carolina schools are leaving school with much more massive amounts of student loans. At Charlotte Christian College and Theological Seminary, for example, 100 percent of students graduate with debt, and the average debt load at graduation is around $50,000.
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