Home Banking & Finance Xerox paying $2.4 million to settle issues with student loan business

Xerox paying $2.4 million to settle issues with student loan business

Xerox Corp. is paying $2.4 million to settle Massachusetts state prosecutors’ allegations that the Norwalk company was violating federal law when it came to its student debtors.

Xerox stood accused of taking an unusual amount of time to process student debtors’ applications to reduce their payments under a federal program; charging excessive fees; and overcharging active-duty service members, among other alleged violations.

Maura Healey

The company “regularly undermined the opportunity for students to access appropriate repayment plans,” the Bay State’s Attorney General, Maura Healey, said. “This conduct increases the already high cost of education, damages credit, and prevents students and their families from achieving long-term economic security.”

As part of the settlement, about 800 borrowers will split some $400,000 as compensation for Xerox’s failure to process their applications to make lower monthly payments. Healey’s office said that the state hopes to offer a portion of the remaining $2 million to borrowers struggling with their student loan bills.

Xerox entered the student loan business in 2010 with the $6.4 billion acquisition of Affiliated Computer Services. The student loan unit and other business services units will be part of Conduent, its previously announced spinoff company, which is expected to begin operations at the end of the year.


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