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Student Loan Borrowers Sue Education Department For Botching Loan Discharges

Student loan borrowers have filed a lawsuit against the US Department of Education, alleging that it has failed to properly report discharged student loans, causing financial harm. The lawsuit claims that the department has unlawfully reported forgiven debts on credit reports, affecting over 300,000 people. The borrowers' debts were canceled due to school fraud or other issues. The department's actions have led to a proposed class-action lawsuit.

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  • ✓ Over 300,000 student loan borrowers have been affected by the Department of Education's incorrect credit reporting.
  • ✓ The Department of Education is accused of reporting $4.6 billion in canceled student loans as unpaid debts on borrowers' credit reports.
  • ✓ The lawsuit claims that the Department of Education unlawfully reported discharged student loans on credit reports, despite the debts being forgiven.
🛡️ Source Corroboration: 14 independent reporting domains (85% confidence) ⏱ Read time: ~2 min

What changed

A new lawsuit has been filed against the US Department of Education, alleging that it has failed to properly report discharged student loans, causing financial harm to borrowers.

Live updates

  1. Student Loan Borrowers Sue Education Department Over Credit Reporting

    Student loan borrowers have filed a lawsuit against the US Department of Education, alleging that it has failed to properly report discharged student loans, causing financial harm. The lawsuit claims that the department has unlawfully reported forgiven debts on credit reports, affecting over 300,000 people. The borrowers' debts were canceled due to school fraud or other issues. The department's actions have led to a proposed class-action lawsuit.

    Why it matters

    This lawsuit highlights issues with the US Department of Education's handling of student loan discharges. Borrowers who had their debts forgiven are still facing financial consequences due to incorrect credit reporting. This case may have implications for others in similar situations. The Department of Education's reporting practices have come under scrutiny.

    What is confirmed

    • Over 300,000 student loan borrowers have been affected by the Department of Education's incorrect credit reporting.
    • The Department of Education is accused of reporting $4.6 billion in canceled student loans as unpaid debts on borrowers' credit reports.
    • The lawsuit claims that the Department of Education unlawfully reported discharged student loans on credit reports, despite the debts being forgiven.

    Still unconfirmed

    • The Department of Education's actions may have impacted borrowers who had their debts canceled due to school fraud or other issues.

    What to watch next

    • The outcome of the proposed class-action lawsuit
    • The Department of Education's response to the allegations
    • Any changes to the Department's credit reporting practices
    Sources used for this update (16)
    1. baynews9.com — Student loan borrowers face new repayment rules as defaults continue to rise
    2. CNBC — Student loan borrowers sue Trump administration over forgiven debts on credit reports
    3. WSJ — Student Loan Borrowers Allege Canceled Debt Is Still Trailing Them
    4. The Washington Post — Students sue Education Dept., claiming it reported $4.6B in canceled loans as debt
    5. Business Insider — 300,000 student-loan borrowers got their debt wiped out — but their credit is still taking a hit, a new lawsuit says
    6. Forbes — Student Loan Borrowers Sue Education Department For Botching Loan Discharges
    7. KIRO 7 News Seattle — Two student loan borrowers suing Department of Education over credit issues
    8. www.law360.com — Banking : Law360 : Legal News & Analysis
    9. www.cnbc.com — Student loan borrowers sue over credit reports listing forgiven debt
    10. www.businessinsider.com — Student-Loan Borrowers Got Debt Relief, Credit Still Hit: New ...
    11. flipboard.com — Student Loan Borrowers Sue Education Department For Botching Loan Discharges
    12. flipboard.com — Education Department extends deadline for student loan interest rate discount
    confidence 85%
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