The Student Loan Servicing Alliance has sued Washington, D.C., over a requirement that companies that collect education debt payments first obtain a license with the District, the Washington Post reported.

The District and three states use licensure of student loan servicers to monitor compliance with federal law and investigate their behavior, according to the newspaper. In a statement, SLSA Executive Director Winfield Crigler said the District's requirements were well-intentioned, "but they hurt borrowers more than they help."

"Adding state requirements on top of already stringent federal guidelines violates federal preemption and creates additional layers of complexity," Crigler said. "This lawsuit is about preserving uniform federal guidelines to ensure borrowers know what to expect from their servicer regardless of where they live." http://bit.ly/2pwrkIY

SLSA alleges the District is violating a provision of the Higher Education Act that exempts loans authorized by the federal government from disclosure requirements in state law. The group explored suing other states on licensure but chose the District because its courts are experienced in dealing with cases involving federal interests, the Post reported.

The lawsuit was filed in U.S. District Court for D.C. http://wapo.st/2IKICe2

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