Loan Service Agrees to Pay Nearly $8 Million to Settle Alleged False Claims Related to Federal Education Loans | OPA

Conduent Education Services LLC, FKA Xerox Education Services LLC, dba ACS Education Services LLC (CES), a contracting company that provides student loan services to lenders under the Federal Family Education Loan Program (FFEL), has agreed to pay $7.9 million to resolve allegations . You violated the False Claims Act by submitting or causing false allegations to be submitted to the Ministry of Education. Prior to this settlement, CES paid $1.4 million to the Department of Education under a remedial plan to partially resolve the allegations and received credit for that payment under the settlement agreement.

Loan service providers are required to accurately report the impact of monthly student loan payments, capital capitalization, and other changes on borrowers’ accounts to the Department of Education. The settlement announced today resolves allegations that between 2006 and 2016, CES deliberately failed to make required financial adjustments to borrowers’ accounts and improperly treated some borrowers as eligible for a military deferment when they were not, resulting in incorrect reporting to Department of Education and losses to the United States. CES stopped servicing commercial federal student loans in September 2019.

Acting Assistant Attorney General Brian M. “The decision announced today reflects the department’s commitment to pursuing entities that fail to fulfill their obligations to the United States.”

“Accountability of loan officers is a high priority for the Biden-Harris administration, so I am delighted that inappropriate behavior at Conduent Education Services has received the oversight and investigation it deserves,” said Undersecretary for Education James Caval. “We are grateful to the Department of Justice for working with the Department of Education to ensure that CES is accountable to borrowers and taxpayers.”

The decision in this matter was the result of an investigation by the Department of Justice’s Civil Division, Commercial Litigation Branch, and Fraud Division, with the assistance of the Federal Student Aid offices and the Department of Education’s General Counsel.

Claims resolved through settlement are claims only and liability has not been established.

Leave a Comment