March 20, 2018 / 8:16 PM / 4 months ago

Judge tosses racketeering claims against student loan servicer

Student loan servicer Pennsylvania Higher Education Assistance Agency does not have to face a proposed class action accusing it of racketeering for fraudulently converting teachers’ government grants into loans, a federal judge in Ohio ruled on Monday.

U.S. District Judge Sara Lioi on Monday said the teachers failed to show that the servicer committed fraud as defined by the U.S. Racketeer Influenced and Corrupt Organizations Act (RICO). She also rejected unjust enrichment claims against PHEAA, one of the country’s largest servicers of U.S. Department of Education student loans, which also services education grants.

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