State says loan company mismanaged debt-forgiveness program

BOSTON – One of the nation’s largest student-loan companies is accused of mismanaging programs that offer debt forgiveness to public servants.

A lawsuit filed Wednesday by Massachusetts Attorney General Maura Healey says problems at the Pennsylvania Higher Education Assistance Agency have caused financial harm to many teachers and other public servants.

The agency oversees a federal program that forgives remaining student loans for public servants after they make 120 qualifying monthly payments. Healey says processing delays at the agency have prevented borrowers from making payments and set them back on their path toward forgiveness.

The lawsuit also says a problem in the billing system overcharged tens of thousands of students nationwide.

A statement from the agency says it “does not agree with the allegations” but is committed to resolving any problems.