Like Ali v. Frazier II and III, it's not much of a rivalry
if one side keeps winning the decision.
The battle began when the Department of Education fired a shot
across the bow with its letter arguing that state laws attempting
to regulate student loan servicers – whether through
licensing requirements or consumer protection laws – were preempted by federal law, which calls
for uniform administration of federal student loan programs. Now
state victories are starting to pile up.
Given consumer disclosures are regulated under federal laws, the
Higher Education Act (HEA) and the Truth-in-Lending Act (TILA),
defendants may seek to have state-based claims tossed on the basis
that servicing failures complained of should be characterized as
such. But two recent decisions finding no preemption – one in
federal court in Illinois and another in state court in
Pennsylvania – each denying servicer Navient
Corporation's motions to dismiss allegations of servicing
misconduct,
