February 1, 2019 / 10:29 PM / 7 months ago

Navient must face lawsuit over collecting debt from bankrupt students

Editor’s note: (This post has been corrected throughout to show that Sallie Mae was not a defendant, having been dismissed in a joint stipulation in October 2017).

Student lender Navient must face a proposed class action alleging that it improperly tried to collect on thousands of student loans that had been canceled in bankruptcy, a federal bankruptcy judge ruled on Thursday.

Federal bankruptcy law exempts most student debt from being canceled, or discharged in bankruptcy, but U.S. Bankruptcy Judge Elizabeth Strong in Brooklyn said the students suing Navient made at least plausible claims that the type of loans they received were subject to discharge.

To read the full story on WestlawNext Practitioner Insights, click here: bit.ly/2sZvqvl

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