Student Loan Servicer Breached Collection Injunction, Judge Says

A judge barred Pennsylvania Higher Education Assistance Agency from collecting on thousands of private student loans that borrowers say were discharged in bankruptcy, finding it didn’t comply with a nationwide injunction.

The Wednesday ruling from Judge Elizabeth S. Stong of the US Bankruptcy Court for the Eastern District of New York follows her May order enjoining PHEAA, which does business as American Education Services, and Firstmark Services from collecting on such loans.

The judge partially granted a motion by a proposed class action to hold the lender in contempt for violating the order and halt loan collections. She ordered PHEAA ...