Navient Must Pause Collecting Some Post-Bankruptcy Student Loans

Navient Corp. received a court ruling that temporarily bars the student loan processing giant from continuing to collect loan repayments from borrowers who claim their obligations were wiped out in their personal bankruptcy.

Judge Elizabeth Stong of the US Bankruptcy Court for the Eastern District of New York said in a July 8 order that she was issuing the temporary restraining order because Hilal Khalil Homaidan, the borrower who sued Navient in a proposed class action, will likely succeed on the merits of his case.

The pause on collections should continue until a court overseeing Homaidan’s lawsuit determines whether Navient ...