Commonwealth of Virginia
Office of the Attorney General
Jason S. Miyares
202 North 9th Street
Richmond, Virginia 23219
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Attorney General Miyares Announces Plan to Cut in Half Collection Fees Assessed on Overdue State Student Debt:
Resulting in Lower Fees Assessed than the National Rate on Defaulted Federal Student Loans
RICHMOND, VA – Attorney General Jason Miyares announced today an internal policy that will immediately provide relief to working families and students struggling with student debt. The Office of the Attorney General is statutorily required to perform debt collection legal services for certain Virginia state colleges and universities on overdue student accounts. Many times, the collection fees accessed on overdue accounts significantly increase the amount of money owed by students by as much as 30%. Attorney General Miyares knows that's wrong.
"As someone who worked to put themself through college and still has their own student loans, I understand the strain student loans can put on working families. By working to reduce the attorney collection fee from 30% to 15% on accounts deemed delinquent by the respective universities, we are making immediate, internal procedural improvements that will help Virginians,” said Attorney General Miyares.
The new policy will limit the attorney's fee assessed on student accounts to 15% on any new claim that is referred by a public university or college for collection of a delinquent student account to the Office of the Attorney General, in cases where the OAG has the authority to do so. This is lower than the nearly 18% fee charged by the federal government for defaulted student loans.
In other cases, including where the college or university has established its own policy requiring a higher attorney's or collections fee, the Office of the Attorney General will encourage these institutions to compromise their fee down to 15%, and in exchange the Office of the Attorney General will reduce the contingency fee it charges for its legal services to 15%. In the future, the Office of the Attorney General will encourage universities to amend their collection fee policies to match the 15% rate.
Additionally, the OAG will offer more generous payment plan options to help students avoid a legal suit or entry of judgement against them.
Virginia is home to some of the best public universities in country. This policy change helps students make public education more affordable and accessible to all Virginians.
In addition to this immediate policy change, Attorney General Miyares invites students who have incurred delinquent accounts at a public college or university and who have had their accounts referred to the OAG for collection, to reach out to the OAG to discuss their situation and for consideration of whether additional relief is appropriate under the circumstances.