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U.S. President Donald Trump signed executive orders in the Oval Office at the White House, marking a significant moment in his administration’s approach to various issues, including education and finance.
The Trump administration has decided to dismiss a federal lawsuit initiated against National Collegiate Student Loan Trusts, effectively abandoning a potential $2.25 million settlement aimed at benefiting borrowers who were harmed.
The Consumer Financial Protection Bureau (CFPB) filed the original lawsuit in 2017. This case centered on a coalition of 15 “securitization trusts” formed under Delaware law, responsible for acquiring, pooling, and securitizing student loans.
The CFPB accused these trusts of employing improper debt collection methods, including pursuing lawsuits against borrowers for debts they could not substantiate and attempting to collect on debts that were past the statute of limitations.
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The proposed $2.25 million settlement was intended to assist affected borrowers, but the Trump administration’s recent actions have halted this progress.
Last Friday, the CFPB under President Trump filed a voluntary dismissal of the case.
Additionally, the administration has sought to implement substantial cuts to the CFPB, aiming to terminate up to 1,500 of the bureau’s 1,700 employees. These planned layoffs were recently challenged in court, with a judge blockading the cuts.
In another notable decision, the CFPB dropped a lawsuit against the Pennsylvania Higher Education Assistance Agency in February. This agency had previously been accused of unjustly collecting payments on student loans that had already been discharged through bankruptcy and providing misleading data to credit reporting agencies.
Requests for comments from the CFPB, White House, Pennsylvania Higher Education Assistance Agency, and legal representatives for the National Collegiate Student Loan Trusts went unanswered.
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