Student Loan Borrowers Sue Education Department For Botching Loan Discharges
Student loan borrowers filed a new proposed class action lawsuit on Thursday against the Education Department, claiming that their previously-discharged student loans were unlawfully being reported on their credit reports, long after the debts were supposed to disappear. The allegations are just the latest example of processing problems and botched implementation of debt relief that advocacy groups are increasingly characterizing as a crisis.
“The government cannot tell borrowers their loans are cancelled, report those same loans as debts they still owe, and then ignore them when they try to correct the record,” said Eileen Connor, President and Executive Director of the Project on Predatory Student Lending, the legal organization representing borrowers in the lawsuit, in a statement on Thursday. “These borrowers have done everything asked of them, but this false debt is still shaping where they can live, what they can borrow, and what their futures look like."
