Pierce Bainbridge Investigating Potential Class Action Claims Against Student Loan Servicers

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Pierce Bainbridge Beck Price & Hecht LLP

Nov 27, 2018, 14:06 ET

NEW YORK, Nov. 27, 2018 /PRNewswire/ -- Pierce Bainbridge Beck Price & Hecht LLP is investigating whether student loan servicers violated consumer protection or other laws in connection with the federal Public Service Loan Forgiveness program. If you believe errors or malfeasance by a loan servicer have prevented or delayed you from receiving Public Service Loan Forgiveness by the federal government, you are encouraged to contact Pierce Bainbridge attorney Jonathan A. Sorkowitz at [email protected] for additional information about your legal rights and options.

The Public Service Loan Forgiveness ("PSLF") program, administered by the U.S. Department of Education, was created by the College Cost Reduction and Access Act of 2007 to provide public- and nonprofit-sector employees with a means to have their student loan burden abated.  Borrowers are required to make 120 qualifying monthly payments under a qualifying repayment plan while working full-time for a qualifying employer.  Consequently, student borrowers first began to become eligible for forgiveness under the PSLF program in 2017.  However, as has been widely reported in the press, approximately 99% of student borrowers who have applied for PSLF have been rejected to date.1

The administration of student loans is handled for the federal government by loan servicing companies.  Pierce Bainbridge Beck Price & Hecht LLP is investigating whether errors or malfeasance by those loan servicers may have improperly or illegally led to denials of loan forgiveness.  In particular, the firm is investigating the actions of the following loan servicers:

  • Navient
  • Nelnet
  • Great Lakes Educational Loan Services, Inc.
  • American Education Services
  • FedLoan Servicing
  • ACS/Conduent
  • MOHELA
  • HESC
  • EdFinancial
  • CornerStone
  • Granite State Management & Resources
  • OSLA Servicing

The loan servicer practices which may be causing the high PSLF denial rate include, but are not limited to:

  • Failure to consolidate private loans for borrowers requesting PSLF into federal Direct Loans, as required for loan forgiveness
  • Failure to transfer loans of borrowers requesting PSLF to FedLoan Servicing, as required for loan forgiveness
  • Miscalculation of a borrower's correct monthly payment in an Income-Driven Repayment (IDR) plan
  • Delays in placing students into an IDR plan, or in calculating IDR payments, resulting in unnecessary interest-capitalization events
  • Placement of borrowers who request PSLF into ineligible payment plans
  • Placement of borrowers who request PSLF into unnecessary loan forbearance
  • Loss of required paperwork, such as employment certification forms, or failure to appropriately submit it to the federal government
  • Other errors and malfeasance by loan servicers that prevent borrowers from receiving loan forgiveness for which they would otherwise be eligible

If you believe errors or malfeasance by any of the above loan servicers have prevented or delayed you from receiving Public Service Loan Forgiveness by the federal government, please contact Pierce Bainbridge attorney Jonathan A. Sorkowitz at [email protected] for additional information about your legal rights and options.

About Pierce Bainbridge Beck Price & Hecht LLP

Pierce Bainbridge has significant experience in prosecuting major class action cases and taking cases through trial across the United States. We have represented individuals, companies, funds, foundations and other entities worldwide with offices in New York, Los Angeles, and Washington, D.C.

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1 Source:  https://www.gao.gov/products/GAO-18-547

SOURCE Pierce Bainbridge Beck Price & Hecht LLP