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Attorney General to cut some debt collection fees on college accounts

Attorney General Miyares announced Jan. 27 an internal policy change that he says will immediately provide relief to families and students struggling with student debt. Reducing the attorney collection fee from 30 per cent to 15 per cent on accounts deemed delinquent by the respective universities would be “immediate, internal procedural improvements that will help Virginians,” said Miyares.

The new policy will limit the attorney’s fee assessed on student accounts to 15 per cent 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.

The Office of the Attorney General is statutorily required to perform debt collection legal services for certain Virginia state colleges and 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 percent, according to a news release from the Attorney General.

Since he worked to put himself through college and still has his own student loans, the Attorney General says he understands the problem,

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 percent, and in exchange the Office of the Attorney General will reduce the contingency fee it charges for its legal services to 15 percent. In the future, the Office of the Attorney General will encourage universities to amend their collection fee policies to match the 15 percent rate.

Additionally, the OAG will offer more generous payment plan options to help students avoid a legal suit or entry of judgment against them, the news release said.

This policy change helps could make public education more affordable and accessible to all Virginians.

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.

For more context about this issue, see VPM’s Dreams Deferred Series.

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