UPDATE: On April 10, 2020, the 11th Circuit Court of Appeals issued a unanimous decision affirming Student Defense's position, vacating the lower court's ruling, and remanding our case for further proceedings. Read more about our victory here.
This case is about the ability of student loan borrowers to assert their rights under state consumer protection laws to remedy affirmative misstatements made by student loan servicers. The named plaintiffs in this case allege that Great Lakes, the servicer of their federal student loans, specifically and systematically made false statements that led them to believe that they were complying with the terms of the Public Service Loan Forgiveness (“PSLF”) program. PSLF is a federal program designed to encourage and reward individuals who seek and obtain higher education in order to pursue careers in public service.
Although Great Lakes encouraged student loan borrowers to contact it for individualized advice, Great Lakes falsely advised the plaintiffs that they were eligible for loan forgiveness in the PSLF program. In reality, however, had Great Lakes been truthful to them, the plaintiffs – and potentially thousands of other students -- would have learned that the type of student loans they had were not eligible for PSLF, but rather that they needed to consolidate their loans into a different type of loan in order to be eligible for forgiveness under the PSLF program.
In September 2018, the U.S. District Court for the Northern District of Florida held that such claims were expressly preempted by federal law, insofar as the Higher Education Act preempts states from applying “disclosure requirements” with respect to federal student loans. Under the holding of the District Court, student loan borrowers are therefore barred from seeking relief under state consumer protection laws for unfair, deceptive, and fraudulent acts and practices.
NSLDN became involved in this litigation after an appeal was filed, to provide expert legal advice and strategy on issues of preemption.