SCRANTON, Pa. (Legal Newsline) - The Consumer Financial Protection Bureau has filed suit against the trusts that administer student loans, arguing they failed to grant forbearance to debtors during the COVID-19 pandemic.
The CFPB on May 6 in Pennsylvania federal court sued the Pennsylvania Higher Education Assistance Agency (PHEAA) and 15 National Collegiate Student Loan Trusts (NCSLTs).
The suit alleges that these entities denied essential information to student loan borrowers, particularly during the early months of the COVID-19 pandemic.
According to the complaint, many borrowers were not provided with basic responses to their requests for relief. The CFPB accuses PHEAA of directing borrowers to seek assistance from the unresponsive NCSLTs, causing significant consumer harm.
PHEEA could've offered temporary forbearances for borrowers during COVID but mishandled some of them, the suit says.