Student Loan Creditor, Fined for ‘False’ Lawsuits, Must Halt Collections

One of the nation’s largest holders of private student-loan debt must refund millions of dollars to borrowers and temporarily stop many of its collection activities, under a settlement with federal regulators announced on Monday. The creditor, the National Collegiate Student Loan Trusts, holds $12 billion in student loans that were originally made by banks. In Monday’s settlement with the Consumer Financial Protection Bureau, the trusts agreed to pay nearly $19 million in penalties and borrower refunds — and could be on the hook for millions in additional payments and forgiven loans.

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