Pa. Higher Ed Assistance Agency Not a "Debt Collector" Under Law, Court Rules

The United States Court of Appeals decided on Friday to uphold the dismissal of a complaint by Hope Darrisaw against the Pennsylvania Higher Education Assistance Agency.

Darrisaw sued PHEAA under the Fair Debt Collection Practices Act after the agency tried to collect a debt she never borrowed. Though an agency representative told Darrisaw they had no record of her outstanding debt, the agency proceeded to garnish her paychecks.

The district court dismissed her complaint on the grounds that PHEAA is not a “debt collector” under the act. The agency guarantees federal student loans for the secretary of education, and so the court concluded that it falls under an exception in the law for those who collect debts “incidental to a bona fide fiduciary obligation.”

The court of appeals, concluding the same, upheld the dismissal.