CFPB, Federal Agencies, State Agencies, and Attorneys General
The CFPB has published a notice in the Federal Register seeking comment on its request for approval by the Office of Management and Budget of a new one-time survey of student loan borrowers. Comments must be received by September 18, 2023.
The survey is intended to allow the CFPB “to understand [student borrowers’] borrowing decisions, their experience managing their loans, and their expectations for the future.” … Continue Reading
Less than six weeks after the U.S. Supreme Court held that President Biden lacked authority to advance his signature effort to forgive upwards of $430 billion in federal student loans, a new challenge has been filed to other major elements of his higher-education agenda. On August 4, 2023, the Cato Institute and Mackinac Center for Public Policy filed suit in the Eastern District of Michigan, alleging that the U.S.… Continue Reading
On February 28, 2023, the Supreme Court heard oral argument in two separate cases challenging the Biden Administration’s authority to proceed with its plan to forgive approximately $400 billion in federal student loans. In the first case, the Biden Administration seeks to vacate an injunction granted by a three-judge panel of the U.S.… Continue Reading
On December 12, 2022, the Supreme Court announced that it would grant a petition for certiorari as to the separate loan-forgiveness challenge pending before the Fifth Circuit Court of Appeals and calendar the matter for argument in February 2023.
On December 1, 2022, the U.S. Supreme Court granted a writ of certiorari to consider the standing of the plaintiffs who obtained an an injunction from the Eighth Circuit Court of Appeals that currently prevents the Biden Administration from enacting its plan to forgive approximately $400 billion in federal student loans. … Continue Reading
In conjunction with efforts to forgive federal student debt for certain borrowers, President Biden’s Justice Department recently announced new guidance for its attorneys to use when deciding whether to recommend that a bankruptcy judge discharge an individual’s federal student loans.
The guidance seeks to streamline the process of discharging federal student debt which, unlike other consumer debt, is not automatically discharged through bankruptcy. … Continue Reading
On November 10, 2022, a federal district court in the Northern District of Texas entered judgment in favor of two plaintiffs on an Administrative Procedure Act (APA) claim seeking vacatur of the Biden administration’s plan to forgive approximately $400 billion in federal student loans under the HEROES Act of 2003. The court, citing a rarely used provision in Rule 65 of the Federal Rules of Civil Procedure, converted the plaintiffs’ motion for a preliminary injunction into a motion for summary judgment over the Biden administration’s objection, and then entered a final ruling on the merits that will (along with the still-pending administrative stay entered by the Eighth Circuit) prohibit the Biden administration from moving forward with its loan forgiveness plan—at least unless and until the administration obtains a stay and/or reversal of the court’s judgment in the Fifth Circuit Court of Appeals, which it has already sought.… Continue Reading
Student loan servicing was the focus of recent CFPB attention in the form of a blog post, “Busting myths about bankruptcy and private student loans,” and a report (labeled a “special issue brief”) titled “Student Loan Borrowers Potentially At-Risk when Payment Suspension Ends.” Both items raise areas of compliance risk for student loan servicers.… Continue Reading
Kentucky recently enacted HB 494, titled the “Student Education Loan Servicing, Licensing, and Protection Act of 2022,” which will require student loan servicers to be licensed in Kentucky. The Act applies to servicers of private student loans and federal student loans.
Servicers of private student loans must submit a licensing application to the Commissioner of the Kentucky Department of Financial Institutions that includes certain specified information, including the name of at least one managing officer who has a minimum of at least two years’ experience in the student education loan servicing industry. … Continue Reading
The U.S. Department of Education has issued a new interpretation “to revise and clarify its position on the legality of State laws and regulations that govern various aspects of the servicing of Federal student loans.” The new interpretation revokes and supersedes the ED’s 2018 preemption determination. It was not unexpected, as the ED has taken a number of steps in recent months to reverse Trump Administration policies that hindered state oversight of federal student loan servicers. … Continue Reading
The Department of Education has announced that it has selected former CFPB Director Richard Cordray as the Chief Operating Officer of Federal Student Aid. In addition to having served as CFPB Director, Mr. Cordray formerly served as Ohio Attorney General.
Rohit Chopra, President Biden’s nominee for CFPB Director, previously served as the CFPB’s Private Education Loan Ombudsman under Mr.… Continue Reading
