Attorney General Jason Miyares announced a new policy to cut attorneys’ fees for debt collection on student loan debt at Virginia’s public colleges. Under Virginia law, the Office of the Attorney General (OAG) is responsible to provide debt collection services on behalf of state agencies, and can retain as revenue up to 30 percent. Miyares’ internal policy limits that to 15 percent on new claims referred to the OAG, where possible.
“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 percent to 15 percent on accounts deemed delinquent by the respective universities, we are making immediate, internal procedural improvements that will help Virginians,” Miyares said in a Wednesday press release.
The authority of the OAG to implement the cut is limited.
“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,” Miyares’ release explains.
The policy is a reaction to the VPM News “Deferred Dreams” series. Part two of the series describes students already behind on payments facing additional costs including the 30 percent attorney fees plus interest. The article highlights the contrast between then-Attorney General Mark Herring’s legal fights against predatory debt practices while still collecting the 30 percent fee.
The press release adds, “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.”
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Eric Burk is a reporter at The Virginia Star and The Star News Network. Email tips to [email protected].
Photo “Jason Miyares” by Jason Miyares.
