Navient Loses Student Loan Bankruptcy Battle But Long Fight Looms

Private student loan borrowers won a nationwide injunction barring Navient Corp. from trying to collect on certain loans that they believe should have been discharged in bankruptcy, but their quest for financial relief from the debt servicer is just heating up.

Courts have chipped away in recent years at the long-held notion that a debtor can’t wipe out any type of student loan debt in bankruptcy without a burdensome showing of “undue hardship.”

The plaintiffs, who sued Navient in a proposed class action in New York bankruptcy court, now want the class certified so they can seek further relief from ...