“PHEAA has ignored its responsibilities and illegally pursued borrowers for loans they no longer owe,” CFPB Director Rohit Chopra said in a statement. “The CFPB is suing PHEAA for demanding money from borrowers that they do not owe and for reporting false information to credit reporting companies.”
Previous Enforcement Action
This lawsuit follows a settled enforcement action from May 6, where the CFPB filed a case against PHEAA and the National Collegiate Student Loan Trusts. This prior case involved alleged failures to properly handle borrower requests for payment relief, especially during the COVID-19 pandemic. The settlement terms, which include roughly $3 million in consumer redress and $2.15 million in fines, are still pending court approval.
US CFPB Sues Student Loan Servicer For Illegal Collections : Seeking Relief and Fines
The current lawsuit seeks fines, consumer redress, and other relief for the affected borrowers. The CFPB’s legal team in this case includes Adrienne Warrell, Elizabeth A. Homan, and Emily Holness. As of Friday, PHEAA had not responded to a request for comment on the CFPB’s latest suit.
