CFPB, Federal Agencies, State Agencies, and Attorneys General
The FTC has recently taken action against two student loan debt relief companies and their owners.
In the first case, a federal judge has permanently banned Florida-based Start Connecting LLC and Colombia-based Start Connecting SAS (doing business as USA Student Debt Relief (USASDR)), and their owners and operators Douglas Goodman, Doris Gallon-Goodman, and Juan Rojas from the debt relief industry as well as from participating in any telemarketing.… Continue Reading
On February 18, 2025, the U.S. Court of Appeals for the Eighth Circuit—following up on its August 2024 unsigned order—resolved an expedited appeal concerning a district court injunction preventing the U.S. Department of Education from proceeding with implementation of its much-debated SAVE repayment plan. The opinion, which affirms the district court, calls into question the legality of not only the SAVE plan itself, but also existing income-contingent repayment (“ICR”) plans such as PAYE and REPAYE.… Continue Reading
The CFPB and the National Collegiate Student Loan Trusts—a group of fifteen securitization trusts that acquire, pool, and securitize student loans—have entered into a proposed final consent judgment that, if approved, would resolve the CFPB’s allegations that the Trusts unlawfully filed defective debt collection lawsuits to collect on private student loans.… Continue Reading
A federal judge has issued a temporary injunction against Superior Servicing and its operator Dennise Merdjanian, following FTC allegations that the company claimed to be affiliated with the Department of Education, collected illegal advance fees and made other deceptive claims.
Judge Gloria M. Navarro of the U.S. District Court for the District of Nevada also froze the company’s assets and agreed to the appointment of a receiver.… Continue Reading
CFPB examiners have identified a variety of illegal practices across student loan markets, the bureau said, in a special edition of its Supervisory Highlights. The report covers alleged violations related to student loan refinancing, private lending and servicing, debt collection and federal loan servicing.
“Companies break the law when they mislead student borrowers about their protections or deny borrowers their rightful benefits,” CFPB Director Rohit Chopra, said, as he released the report.… Continue Reading
The CFPB’s Student Loan Ombudsman has released his annual report, again emphasizing complaint volume without investigating all complaints, suggesting that states should acquiesce when the Department of Education promulgates rules that exceed its statutory authority, and blaming servicers for communications issues caused in no small part by the Department of Education’s failure to provide clear directions and to set and adequately fund appropriate staffing levels for federal student loan servicing.… Continue Reading
The CFPB has taken action to permanently ban Student Loan Pro and its owner, Judith Noh, from offering consumer financial products or services.
In a complaint, filed in the U.S. District Court for the Central District of California, the CFPB alleged that Student Loan Pro and Noh violated federal law when they charged borrowers upfront fees to file paperwork to access free debt-relief programs available to consumers with federal student loans.… Continue Reading
The CFPB has filed suit against student lender Climb Credit, Inc. and its largest shareholder 1/0 (one zero), alleging that the lender induced students to take out loans by misrepresenting the quality of the training programs at their partner schools and by making false claims about the salaries and employment rates of graduates.… Continue Reading
In an unsigned order dated August 9, 2024, the U.S. Court of Appeals for the Eighth Circuit signaled its frustration with the U.S. Department’s ongoing efforts to proceed with implementation of its much-debated SAVE repayment plan notwithstanding an earlier partial injunction entered by a federal district court.
In a case filed by Republican state officials (the “States”), a federal judge in Missouri had previously concluded that the States were likely to prevail on their claim that the Department of Education exceeded its authority in creating the SAVE plan, and that the prospect of irreparable harm warranted an injunction prohibiting the Department from forgiving loans under the SAVE plan while the case was litigated.… Continue Reading
Two federal judges recently said that the Education Department lacked the power to reduce or cancel federal student loans under the SAVE program; an appeals court subsequently lifted the injunction in one case.
In cases filed by Republican state officials, federal judges in Kansas and Missouri, both Democratic appointees, issued injunctions, saying that Congress had not given the Department of Education the power to reduce and cancel those loans as it had planned to do under the SAVE program.… Continue Reading
