300,000 student-loan borrowers got their debt wiped out — but their credit is still taking a hit, a new lawsuit says
The lawsuit concerns borrowers whose loans were wiped out via the borrower defense to repayment program, after they were defrauded by "predatory for-profit" schools, including Ashford University and ITT Technical Institute. It specifically pertains to borrowers who received such relief between April 2022 and January 2025.
The filing said these borrowers' balances were reported to credit bureaus as outstanding debt, which affected their credit scores. PPSL estimated that, based on publicly available data, the department is wrongfully reporting 300,000 student-loan borrowers for $4.6 billion of canceled debt.
