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Advocates Praise Student Loan Scam Crackdown, Demand More

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A federal-state crackdown on student loan scams drew strong praise Monday from borrowers and their advocates — and reignited criticism of the U.S. Department of Education for doing too little.

Prosecutors are acting against three dozen companies that they say swindle borrowers by charging fees on false promises of debt relief. Until now, state attorneys general have operated piecemeal, shutting down organizations in individual states while the companies continue gouging student loan holders elsewhere.

“These actions are sorely needed,” says Suzanne Martindale, staff attorney at Consumers Union, a political advocacy organization. But, she says, “we still have a really complex and broken system. This is the time for regulators who have any...

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