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Pennsylvania Higher Education Assistance Agency (PHEAA) d/b/a American Education Services or AES

On May 31, 2024, the Bureau filed a lawsuit against the Pennsylvania Higher Education Assistance Agency (PHEAA), a student loan servicer and guaranty agency headquartered in Harrisburg, Pennsylvania, which does business as American Education Services or AES. AES is one of the nation’s largest servicers of private student loans. The Bureau alleges that AES fails to recognize that some private student loans are discharged in bankruptcy and lacks policies and procedures to identify which private loans it services have been discharged by a bankruptcy court’s order of discharge. As a result, AES treats certain private student loans that were discharged as though the consumer still owes those debts such that consumers pay thousands of dollars they did not owe. The Bureau alleges that by failing to maintain policies and procedures to determine whether the education loans it services are discharged in bankruptcy and collecting and furnishing on discharged debts, AES has engaged in unfair, deceptive, and abusive acts or practices in violation of the Consumer Financial Act of 2010. The Bureau further alleges that AES violated Regulation V, the implementing regulation for the Fair Credit Reporting Act, by failing to establish policies or procedures regarding furnishing loans that were discharged in bankruptcy. The Bureau seeks injunctive relief, consumer redress, a civil money penalty, and other appropriate relief.


Press release

CFPB Sues Student Loan Servicer PHEAA for Pursuing Borrowers for Loans Discharged in Bankruptcy