Consumer complaint received 2024-10-29
Product: Student loan — Private student loan
Issue: Dealing with your lender or servicer — Don't agree with the fees charged
Company: WELLS FARGO & COMPANY (IA)

My name is XXXX XXXX. I have submitted several CFPB complaints against Wells Fargo Student Loan Services over the last 4-5 months. I have gotten denied each time I have submitted the complaint regarding my private student loans that I have with them. The first complaint was regarding discharging loans due to school misconduct. I ended up receiving a general e-mail back in response to the claim with them saying that they did everything right when dispersing the loan therefore they were not going to do anything in regard to it. Secondly, I submitted a complaint because I had filed XXXX  XXXX Bankruptcy back in XXXX. As these are not Government student loans, they should have been able to have been dismissed. I was told in the response e-mail to contact my lawyer. 

I am submitting another claim in hopes that this will be the one that changes the outcome of these loans and potentially get them discharged and refunded the money that I have paid over the years. 

I attended XXXX XXXX  back from XXXX. I was given false promises for job outlooks, pay that I would get as well as assistance from the school with help finding a career. I had to fully fund my education through both Government and Private Student loans. After years of being lied to, I submitted my case to borrower defense to repayment to try to get my loans discharged. I ended up receiving a letter stating that I was apart of the XXXX XXXX  XXXX lawsuit because I had applied for borrower defense back in XX/XX/XXXX. The background on the XXXX XXXX  XXXX lawsuit was regarding students who attended various for-profit colleges. 

According to the website XXXX under the XXXX XXXX XXXX lawsuit, it states Between XXXX and today, nearly XXXX borrowers have asserted their right under federal law to discharge their federal student loans due to their schools misconduct ( borrower defense ). As it was legally obligated to do, the Department of Education started to adjudicate these claims in XXXX, approving nearly XXXX borrower defenses in the six-month period before XX/XX/XXXX. 

It goes on to state Then, under XXXX XXXX, the Department of Education halted all processing of borrower defense claims. As of XX/XX/XXXX, more than XXXX students had a borrower defense application pending. Many had been unresolved for nearly four years. The plaintiffs filed this lawsuit to demand that the Department do its job and start adjudicating their borrower defenses immediately. Over the course of this three-year litigation, the borrower defense backlog only grew, while plaintiffs uncovered evidence that Departments policies had stacked the deck against borrowers. The recently approved settlement agreement will resolve these long-pending applications and finally deliver justice to borrowers. 

After years of deliberation, on XX/XX/XXXX, the course granted final approval of the settlement. Under this case, it is defines the class as all individuals who had a borrower defense application pending as of XX/XX/XXXX. 

According to the FAQs page under the XXXX XXXX XXXX lawsuit on XXXX, the settlement divides the class all individuals who had a borrower defense application pending as of XX/XX/XXXX into two groups. 

The first group is the automatic relief group. You are a member of this group if you are a Class Member who submitted a borrower defense application relating to the school or schools on this list ( often referred to as the Exhibit C list ). 

I have included a copy of the Exhibit C list that lists XXXX XXXX XXXX XXXX  as one of the schools. 

In addition, the lawyers of PPSL states if you are in this group, then you are entitled to the following relief : ( i ) discharge of your outstanding loans that were the subject of your application, ( ii ) refunds on any amounts you previously paid to the federal government towards these loans and ( iii ) deletion of the credit tradeline associated with those loans from your credit report ( full settlement relief ). 

On XX/XX/XXXX, I received an email from the Department of Education regarding my borrower defense application against XXXX XXXX  starting that I was approved. Please see the attached document proving that I got the approval. 
According to the CFPB page, there was an article from XX/XX/XXXX titled Report of the CFPB Education Loan Ombudsman. 

If you locate page 17, it highlights the information and complaints on Private Student Loans that were submitted to the CFPB. If you look at section 2.2.1 under Cancellation due to school misconduct, it states over the past decade, administrative and judicial findings established that certain schools illegally defrauded their students, including by failing to provide the education or job prospects that they tell students they will provide. Students who took out loans to attend such schools are frequently eligible for cancellation. For instance, federal student loan borrowers who have been defrauded by their schools can apply to discharge federal loans through a program called borrower defense to repayment ( BDR ). Since XXXX, the Department of Education has discharged over {$22.00} XXXX federal student loans for over XXXX XXXX borrowers who were cheated by their schools, saw their institutions precipitously close, or are covered by related court settlements. 

It continues to say, while private student loan borrowers can not access the BDR program, they do have certain rights to challenge the repayment of loans that were based on fraudulent representations. The FTCs Holder-in-Due-Course Rule ( Holder Rule ) requires all covered transactions, including education financing, to include mandated language acknowledging that if the seller fails to satisfy its obligations, the borrower can refuse to repay the loan, regardless of who holds the contract.In the case that the school commits fraud, it is often the borrowers contractual right to assert a claim against the loan holder and seek a discharge of that loan. Complaints, however, have indicated that various private loan servicers provide misleading information about borrowers rights, either dissuading the borrower from pursuing these claims or functionally limiting their ability to do so. These complaints raise questions about whether private student loan services are operating in compliance with loan promissory notes, and they suggest that borrowers who have the right to exercise defense to collection efforts are being forced to continue to pay on their loans.