Bill collectors and law firms working for the Ohio attorney general's office are tacking unreasonably high charges onto the amounts they try to collect from people with long-overdue student loans, according to lawsuits filed by the Legal Aid Society of Columbus. One man said he doesn't even remember taking out loans totaling $900 in the early 1970s, but the state wants to add more than $1,500 in collection costs to the $2,368 he owes in principal, interest and late fees.

Bill collectors and law firms working for the Ohio attorney general�s office are tacking unreasonably high charges onto the amounts they try to collect from people with long-overdue student loans, according to lawsuits filed by the Legal Aid Society of Columbus.



One man said he doesn�t even remember taking out loans totaling $900 in the early 1970s, but the state wants to add more than $1,500 in collection costs to the $2,368 he owes in principal, interest and late fees.



The society has filed lawsuits on behalf of four people who were sued by Ohio State University last year. According to Legal Aid lawyer Scott Torguson, a law firm hired by Attorney General Mike DeWine�s office to sue for judgments against the four violated state and federal laws by demanding excessive collection costs.



The Legal Aid suits ask a court to award the debtors damages under the federal Fair Debt Collection Practices Act and to establish that they owe less than the state is demanding.



Ohio law doesn�t allow private creditors to make debtors pay collection costs, Torguson said. �But in these cases, where the plaintiff is the state of Ohio, collection costs of up to and above 70 percent are added to the amount claimed due,� he said. �This is an unreasonable burden to place on former students struggling to get on with their lives.�



DeWine spokesman Dan Tierney said the office allows collection fees so that taxpayers don�t have to cover the cost. "We try to make (collecting debts) as cost-neutral as possible� to the state agencies that are owed money, he said.



Torguson complains, however, that debtors get no warning or explanation. �There is no possible way for students to know that they will be charged these fees when they take loans from the schools,� he said.



Andrew Coleman, a Northwest Side resident, attended Ohio State in 2004 and borrowed $1,630 through the Perkins Loan Program, which channels federal loans through a university.



Torguson said Coleman didn�t finish repaying his loan because he had financial difficulties. In 2012, when OSU turned the debt over to the attorney general�s office for collection, Coleman owed $1,473 in principal, interest and late charges. When the attorney general�s office hired the law firm Mann & Carducci to sue Coleman in 2015, the firm added $1,054 in collection costs.



The suits against Coleman and the three other debtors who turned to Legal Aid for help were dropped; a spokesman for the attorney general�s office said he can�t comment on why that happened because Torguson�s lawsuits are pending.



Three of the Legal Aid cases, including Coleman�s, involve Perkins loans. In those suits, Torguson cites a federal-student-loan rule that says collection charges can�t exceed 40 percent of the principal, interest and previously agreed-upon late fees. The charges in Coleman�s case were 72 percent of that total.



In the case involving Michael Renner, a West Side resident who received a $3,200 Perkins loan in 1989, OSU said in 1989 that Renner owed $6,591 in principal, interest and late charges. Mann & Carducci�s lawsuit against Renner added $3,010 in collection costs � 46 percent. William Harriston borrowed a total of $900 in 1971 and 1972. OSU sought to collect $2,368 in principal, interest and penalties. The law firm added $1,531, or 65 percent, in collection costs.



In the fourth case, Ohio State directly loaned Andrew Brubaker, who now lives in Colorado, a total of $3,000 between 2003 and 2005. In 2008, those loans, plus interest, were consolidated into a single debt of $4,436.



By the time Brubaker was sued for judgment in January 2016, additional interest and late fees had driven the total to $5,665. Mann & Carducci added $3,550 in collection costs. For direct loans from the state, Torguson�s suit asserts that state law doesn�t allow for adding any collection fees; rather, he says they must be deducted from what the lender is paid.



mcedward@dispatch.com



@MaryMoganEdward