Student Lending

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On May 31, the CFPB filed suit in federal court in the Middle District of Pennsylvania against a Pennsylvania-based student loan servicer accusing it of illegally pursuing student loan debts discharged in bankruptcy and providing false information to credit reporting agencies. The CFPB’s lawsuit asks the court to order the servicer to stop its illegal conduct, provide redress to borrowers, and pay a civil penalty.Continue Reading CFPB Takes Legal Action Against Student Loan Servicer for Chasing Debt on Discharged Student Loans

On May 20, the CFPB settled an enforcement action against a California-based telemarketing firm for practices related to student loan debt relief services. The Bureau has ordered the firm to permanently halt operations and pay a $400,000 civil money penalty, in addition to ordering the recission of all the firm’s existing contracts with consumers.Continue Reading CFPB Shuts Down Debt Relief Provider Over Fraudulent Student Loan Practices

On May 6, 2024, the CFPB resolved an enforcement action against a group of Delaware student loan trusts and a loan servicer (found here and here) for their failures to adequately respond to borrowers’ requests for relief, including during the COVID-19 pandemic. When entered by the court, the stipulated final judgments will require defendants to pay almost $3 million in redress to borrowers, and pay a fine of $2.15 million.Continue Reading CFPB Settles Action Against Student Loan Servicer and Securitization Trusts

On April 17, the CFPB issued a consent order against a San Francisco-based for-profit coding school and its and CEO, banning it from lending to consumers, after it found that the company inflated its job placement rates to students and deceived them about a tuition financing program. Continue Reading CFPB Fines and Bans Coding Bootcamp over Deceptive Student Lending Practices

On April 9, 2024, seven states filed suit against the Biden administration in an attempt to block its new “SAVE” plan, an income-driven repayment plan that leads to eventual loan forgiveness. The case is pending in the U.S. District Court for the Eastern District of Missouri.Continue Reading States Sue the Biden Administration to Stop Loan Relief Plan

On September 29, the CFPB released a special edition of Supervisory Highlights on student loan servicing practices of loan servicers and schools lending to students directly. The report highlights three notable findings related to transcript-withholding practices: Federal Student Loan transfers, and Federal Student Loan payment relief and cancellation programs:
Continue Reading CFPB Supervisory Examinations Find Violations by Student Loan Servicers and University-Owned Lenders

On August 30, the Commissioner of the California DFPI issued a notice of rulemaking proposing new regulations and amendments to current regulations implementing the state’s student loan servicing laws. The proposed regulations aim to implement the provisions of the Student Loan Servicing Act and the Student Loans: Borrower Rights law by:
Continue Reading California Regulator Proposes Changes to Student Loan Servicing Laws

On June 9, the CFPB filed a complaint and proposed order in California federal district court seeking final judgment against the owner of a student loan debt relief company for allegedly withdrawing more than $240,000 from the bank accounts of student borrowers without authorization.
Continue Reading CFPB Targets Student Loan Debt Relief Scam Reboot

On March 30, the CFPB settled with a student loan servicer to resolve allegations that the servicer made deceptive statements to student loan borrowers and misrepresented their forgiveness and repayment options, including deceiving borrowers with Federal Family Education Loan Program (FFELP) loans about their eligibility for Public Service Loan Forgiveness (PSLF).  The consent order requires the servicer to pay a $1 million civil money penalty.
Continue Reading CFPB Fines Student Loan Servicer $1 Million to Settle Alleged UDAAP Violations

On January 20, the CFPB announced that it would begin examining the operations of post-secondary schools that offer private loans directly to students and update its exam procedures to include a new section on institutional student loans.  The CFPB highlights its concern about the student borrower experience in light of alleged past abuses at schools that were previously sued by the CFPB for unfair and abusive practices in connection with their in-house private loan programs.
Continue Reading CFPB to Examine College Lending Practices