State Sues Over Order to Repay Student Aid
The state attorney general’s office filed a suit Friday against the U.S. Department of Education, contesting the federal agency’s order that the California Student Aid Commission pay $62.6 million for allegedly violating rules of the federal student loan program.
The commission asked the attorney general’s office to file the lawsuit during a closed-door session Friday, spokesman Dana Callihan said. Commission Chairman Michael Carona had said earlier that a lawsuit was possible if the Education Department did not reconsider its demands.
The source of the dispute stems from an audit last year by the Education Department, after which it charged that the state commission had collected millions of dollars more than it deserved from the federal government
Federal officials also said the commission had not been aggressive enough in trying to collect millions of dollars in defaulted loans.
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