Michigan facing a lawsuit over student loan program
The state of Michigan is facing a potential class action lawsuit over a student loan program.
Beginning in 2003, the Michigan Students First loan program offered college students an interest rate subsidy after their first 36 on-time loan payments, effectively reducing their interest rate to zero.
But in 2010, the subsidy was ended.
Attorney Jeff Hank says that left thousands of Michigan college students having to pay more in student loans than they had originally planned.
“There were thousands of students involved in this and collectively the value that these students did not receive…overall…is in the hundreds of millions of dollars,” says Hank.
Last month, paperwork was filed in federal court to lay the groundwork for a class action lawsuit.
The Michigan Department of Treasury and Michigan Finance Authority declined to comment on the lawsuit.