Student Loan Borrowers May Receive $225 Million in Compensation for Alleged Improper Collections
In a significant development, student loan borrowers may be eligible for $225 million in compensation due to alleged improper debt collection practices by the National Collegiate Student Loan Trusts.ยน This news comes after the Consumer Financial Protection Bureau (CFPB) took action against the trusts for unlawfully filing defective debt collection lawsuits.
The CFPB alleges that the National Collegiate Student Loan Trusts engaged in unfair practices, including suing consumers for debts they couldn’t prove were owed, filing false and misleading affidavits, and attempting to collect debts after the statute of limitations had expired. These practices have caused significant financial harm to borrowers, who may now be eligible for compensation.
*Background on the Case*
The National Collegiate Student Loan Trusts are a group of 15 securitization trusts that acquire, pool, and securitize student loans. The CFPB filed a lawsuit against the trusts in 2017, alleging that they had engaged in improper debt collection practices.
*What This Means for Borrowers*
The proposed settlement requires the National Collegiate Student Loan Trusts to pay $2.25 million in redress to harmed borrowers. Additionally, the trusts must stop collecting on certain debts covered by the lawsuit and take steps to end pending debt collection lawsuits involving time-barred debt or where necessary documentation cannot be located.
This development is a significant step forward for student loan borrowers who have been affected by improper debt collection practices. It’s essential for borrowers to stay informed about their rights and options for seeking compensation.
*References:* Consumer Financial Protection Bureau. (2025). CFPB Takes Action to Address Illegal Debt Collection Practices by National Collegiate Student Loan Trusts.