Tuesday, December 1, 2015
Must Know: Court Ruling In Borrower's Favor - Pele v. PHEAA (aka destroyer of joy, happiness, and good mental health)
A recent court ruling in October of 2015 could potentially be useful for a number of borrowers who read this blog.
The case was Pele vs. PHEAA (Pennsylvania Higher Education Assistance Authority). PHEAA is in the business of making millions of Americans' lives miserable, which is otherwise referred to as student financial aid services. They apparently even make the lives of people miserable who never take out loans with them. That was at least the case with Mr. Lee Pele.
Mr. Pele began receiving calls from debt collectors, demanding he pay $137,000 in student loan debt. However, Mr. Pele insisted it was not his debt and that the servicing company mixed him up with another individual, one they were hellbent on most likely destroying, because that is what student financial aid services generally enjoy doing and profit from doing.
Mr. Pele was incensed by what PHEAA did to his credit. He also said they royally screwed up his plans to purchase an engagement ring for his girlfriend. Mr. Pele filed a lawsuit against the loan servicer.
PHEAA claimed that they had "sovereign immunity," thus could not be sued by Mr. Pele. It turns out, the court disagreed with PHEAA. Instead, the Fourth Circuit of Appeals said Mr. Pele could pursue his case against the loan servicer and ruled that the company did not have sovereign immunity. So, shitty PHEAA could not ruin the life of Mr. Pele, but luckily they have millions of other people to destroy, so that's still good news for them and their profit margins.
This victory is still significant. If the court had ruled in PHEAA's favor, establishing that the company did have sovereign immunity, then it and potentially other loan servicers - otherwise known as destroyers of happiness, contentment, and positive, healthy, mental well-being - could have gotten away with way shittier things than what they already do. In this case, it would have made it next to impossible for consumers to pursue suits against them in court.
That was not the ruling, however. Instead, it was a win for borrowers, meaning that those with grievances now have the ability to take legal action against state agencies and other non-profit entities, otherwise known as vampires who suck all joy and happiness out of their "customers" in order to make a profit from the sham we know as the financialization of debt.
Furthermore, if borrowers are having problems with their loan servicers, they can also send their complaints to their Attorney General's offices (the majority of these offices have Consumer Protection Agencies who deal with such grievances).
So, theoretically, millions of borrowers - as a result of this ruling - should have more protections. They should also not have to resort to suing, as they can pursue resolutions via their Attorney General's office.