300,000 student-loan borrowers got their debt wiped out — but their credit is still taking a hit, a new lawsuit says
Source: Business Insider ·
A lawsuit filed against the Department of Education argued that student-loan borrowers' forgiven debt is being improperly reported to credit bureaus.
From the source
A new lawsuit argues that the Department of Education continues to report student-loan borrowers' forgiven balances to credit bureaus.ferrantraite/Getty ImagesStudent-loan borrowers who got debt relief are being wrongfully reported to credit bureaus, a new lawsuit says.The lawsuit estimated that around 300,000 borrowers who were defrauded by their schools are affected.Inaccurate reporting could harm a borrower's credit score and trigger wage and benefit garnishment.Student-loan borrowers whose debt was wiped out are still being reported to credit bureaus, a new lawsuit says.On Thursday, the Project on Predatory Student Lending, a borrower advocacy group, filed a lawsuit against the Department of Education. It said that the department is violating the Fair Credit Reporting Act by reporting outstanding balances on "cancelled and legally unenforceable debt."The lawsuit concerns borrowers whose loans were wiped out via the borrower defense to repayment program, after they were defrauded…