Student Loan Servicer Fights Contempt Bid Over Collection Order

The Pennsylvania Higher Education Assistance Agency opposed a contempt motion for allegedly breaching a court order blocking collection efforts on student loans that were discharged in bankruptcy.

The loan servicer said it complied with the order by reviewing files to determine which loans fell under a nationwide injunction issued in May, according to a Wednesday filing in the US Bankruptcy Court for the Eastern District of New York.

The injunction, issued by Judge Elizabeth S. Stong, bars PHEAA and other defendants from collecting on loans that exceeded a borrower’s cost of attendance. She said servicers can’t legally collect on ...