HARRISBURG -- The Massachusetts attorney general is telling Pennsylvania's student loan agency it's under investigation for "consumer protection" issues related to federally-backed student loans.

The Morning Call newspaper of Allentown reported Thursday the board chairman of the Pennsylvania Higher Education Assistance Agency, state Rep. Mike Peifer, R-Pike, confirmed that Massachusetts Attorney General Maura Healey disclosed the investigation in a letter last week.

The newspaper says Healey is considering a lawsuit and may demand refunds.

Peifer declined to release a copy of Healey's letter, citing the possible litigation, and said the agency was trying to determine how much money could be at issue.

He said the investigation involves "several issues" related to PHEAA's federal loan contracting services.

The student loan agency operates two corporate units that together manage and collect more than $392 billion in student loans. It also is distributing about $400 million in grants this year.

The agency employs about 3,600 people and is overseen by a 20-member board that includes 16 state lawmakers.