On December 8, a judge in the U.S. District Court for the Middle District of Pennsylvania granted a joint motion filed by the CFPB and parties to a student loan enforcement action to modify previously proposed stipulated judgments involving a Pennsylvania-based student loan servicer and 15 student loan trusts, significantly reducing the scope and monetary relief of a settlement first proposed in May 2024 (covered by InfoBytes here). The original proposed orders would have required the student loan servicer and affiliated trusts to pay over $5 million in civil penalties and consumer compensation and to implement broad compliance and redress measures for alleged failures to respond to borrower requests for payment relief.

As explained in their brief in support of the joint motion, the parties requested the court narrow the prospective and injunctive relief provisions from the original stipulated judgments entered by the district court, citing a settlement reached pursuant to mediation ordered by the U.S. Court of Appeals for the 3rd Circuit. The parties also requested that the court consolidate the judgments into a single, streamlined order.

Under the revised, consolidated judgment, which concludes the litigation, the trusts and servicer will retain previously paid civil money penalties, but ongoing compliance obligations will be limited to redress for certain borrowers eligible for Servicemembers Civil Relief Act protections.