Xerox Reaches Settlement For Overcharging Student Debtors

(RTTNews) - Xerox Corp. has agreed to pay $2.4 million to settle allegations that the company failed to properly process struggling Massachusetts students' applications for federal repayment plans, Attorney General Maura Healey said.

The attorney general's office accused that the company charged some borrowers excessive late fees, failed to protect some active-duty service members as required by federal law, and made excessive phone calls to borrowers.

"To address this student debt crisis, we need students to be on repayment plans that will help them succeed, not fall further into debt," AG Healey said. "ACS failed to meet this standard and regularly undermined the opportunity for students to access appropriate repayment plans. This conduct increases the already high cost of education, damages credit, and prevents students and their families from achieving long-term economic security."

The Attorney General's officer had launched an investigation in December 2015into certain student loan servicing practices by ACS, and found that the company allegedly failed to properly process student borrowers' applications for federal loan relief associated with the Income-Based Repayment Plan established by the Higher Education Act.