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.
Strange that a state would handle the loans directly, even the federal government doesn't do that. They'll probably start using loan servicers from now on.
The problem however isn't so much after the loans are taken out, it's the ridiculous amounts in the first place, the horrible terms and conditions, and the fact that higher education is worthless for most people.
I have to defend PHEAA. They treated me fairly. I received a 5K bar review study loan in 1990. It enabled me to study during that hot summer without distraction or having to work. I found a job and made payments after bar passage. Two years later, I lost my legal job. I fell behind on payments. I was put into default and they told me that when I got back on my feet and made three consecutive on time payments, they would lift the default. They did exactly that without HOUNDING me. I was treated fairly and I paid it all back with interest. Just like Chrysler.
It's freaky that they were trying to hide behind sovereign immunity. If it had been granted, they would have had full carte blanche to do whatever they liked. Imagine the state government trumping up debts against people to try to raise funds: pay or watch your credit be destroyed.
I think I might have said this before so forgive me but...
There are over 40 million Americans holding $1.3 trillion in student loan debt. Many of us are so hopelessly in the hole that there is no conceivable way out. When taking the entire picture into consideration (lack of consumer protections, stripping of constitutional rights, paying waaaaaay more for a degree than it is worth, the crime ring that is the banks, government, schools, businesses surrounding schools such as restaurants, apartments, etc.) what is keeping all of us from filing a massive class action lawsuit against everyone who has scammed us? How many of these graduates are attorneys who are hundreds of thousands in debt with no jobs? Why can't we collectively put our skills to use and deal with this problem?
Before everyone criticizes me, I have more than paid off my original balance (full balance plus $17,000) yet what I still owe is only $5,000 less than the original amount given - an amount that I have no recollection of ever applying for or receiving. For all I know, someone took out this money in my name. I feel like the person in this story.
%:44, I sense your frustration. Why? Because we no longer have the revenue or tax base to take care of the middle class. We only have enough money and resources to take care of the disabled and some basics. Police and fire. Even those are strained. Our roads are crumbling and communities across the country look ramshackle. Take a road trip across the country and you will notice that the only bright spots in many towns and even larger communities are a new jail or a Walmart. Our disabled are people with IQs under 60 and physical disabilities. At least we were able to attend law school. The problem is what De Toqueville identified in 1848 when commenting on why the US has such a stable, vibrant democracy. Equality of Conditions. That no longer exists and our democracy is at risk/
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