In a sweeping reversal that echoes like a sudden tide shift, the Consumer Financial Protection Bureau has asked a Pennsylvania federal court to dramatically scale back its CFPB $5M Biden-Era settlement—a deal that once promised millions in relief for student loan borrowers.
A Settlement Unraveled
The CFPB’s Tuesday filing seeks to unwind much of the relief the agency secured last year against the National Collegiate Student Loan Trusts and their primary servicer, the Pennsylvania Higher Education Assistance Agency (PHEAA).
The original settlement, forged in the aftermath of widespread servicing failures before and during the COVID-19 pandemic, required the trusts and PHEAA to pay $2.15 million in fines and distribute nearly $2.9 million to harmed borrowers.
But under the new plan, that redress—once a central pillar of the deal—would be almost entirely erased. Only limited relief for certain service member borrowers would remain. The fines, however, would stay with the government, untouched.
