Lack of evidence leads to dismissal of college grad's lawsuit versus loan companies

By Nicholas Malfitano | Oct 11, 2016

PHILADELPHIA – According to a federal judge, current laws regarding repayment of federal student college loans did not support a case from a college grad brought against his loan servicers.

The U.S. District Court for the Eastern District of Pennsylvania’s Judge Gerald Austin McHugh said Sept. 27 that due to a lack of facts and no reason to believe plaintiff David Cushing’s loan documents were “unenforceable”, he had no choice but to dismiss the plaintiff’s amended complaint against Student Loan Marketing Association and Navient with prejudice.

“Cushing states that defendants garnished his wages, demanded loan default fees, made ‘veiled threats’ against him, and reported inaccurate information to credit reporting agencies in violation of federal law,” McHugh said.

“He does not identify the person who took each of these actions, does not specify when each action was taken, and does not state the means by which each purported action was taken. Nor does he specify which defendant did what.”

Cushing alleged that methods by which the defendants’ assessed his loan fees and garnished his wages violated the Federal Debt Collection Practices Act (FDCPA) were improper, but McHugh said the plaintiff failed to provide any evidence substantiating that point.

“Debt collectors may garnish wages under the procedures outlined in 20 U.S.C. Section 1095(a), and they may assess default fees so long as those fees are permitted by the terms of the original loan agreement (See 15 U.S.C. Section 1692(f). Because defendants appear to be in compliance with these statutes, plaintiff has failed to state a claim under the FDCPA,” McHugh said.

McHugh also stated if the defendants made the alleged threats to Cushing, it was “troubling”, but without “factual allegations about the origin, content, or nature of these threats, this naked assertion cannot constitute a claim for relief” – and then moved on to Cushing’s next charges.

“Mr. Cushing argues that defendants violated two provisions of the Federal Credit Reporting Act: 15 U.S.C. Section 1681s-2(a) and 15 U.S.C. Section 1681s-2(b). These claims are facially inadequate,” McHugh said. “Cushing cannot state a claim under Section 1681s-2(a) because there is no private right of action under this section. Moreover, Mr. Cushing has not stated a claim under Section 1681s-2(b).”

McHugh said in order to substantiate this claim, it requires that “(1) A plaintiff has contacted a credit reporting agency (CRA) to report a dispute, (2) The CRA has reported the dispute to defendants, and (3) Defendants have failed to investigate the dispute.”

McHugh added Cushing did not state or imply he contacted a CRA or that a CRA had contacted him, and thus, could not bring this claim forward.

“Cushing further alleges that defendants have violated provisions of the Federal Trade Commission Act (FTCA). No private right of action exists under the FTCA. Plaintiff’s FTCA claims thus fail as a matter of law,” McHugh said.

Though McHugh sympathized with Cushing and many other college graduates who have found difficulty in repaying their federal student loans and deemed the situation as one which “calls out for legislative” relief, he explained the laws as written now do not support Cushing’s case.

“There is, however, no cognizable claim for relief under current law. I therefore dismiss plaintiff’s amended complaint with prejudice,” McHugh stated.

The defendants are represented by Thomas M. Brodowski and Eric M. Hurwitz of Stradley Ronon Stevens & Young in Philadelphia and Cherry Hill, N.J., plus Kevin Harden Jr. and Robert J. Hannen of Eckert Seamans Cherin & Mellott in Philadelphia and Pittsburgh.

U.S. District Court for the Eastern District of Pennsylvania case 2:16-cv-00595

From the Pennsylvania Record: Reach Courts Reporter Nicholas Malfitano at

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