In fact,
a new lawsuit filed Thursday by six state attorneys general, makes this very argument. One of the plaintiffs, Missouri, is home to MOHELA, which manages both federal Direct Loans and these old FFEL program loans.
"The consolidation of MOHELA's FFELP loans harms the entity by depriving it of an asset (the FFELP loans themselves) that it currently owns," says the complaint. "The consolidation of MOHELA's FFELP loans harms the entity by depriving it of the ongoing interest payments that those loans generate."
In response to the lawsuit, Persis Yu, of the Student Borrower Protection Center, says, "FFEL lenders have shown their true colors. Instead of working in the interest of student loan borrowers – their customers – these lenders are holding hostage relief to millions of borrowers in order to keep making a buck off of borrowers suffering."
Changing the policy now, and limiting the number of FFEL borrowers who can conceivably qualify for debt relief, may make these FFEL banks less likely to legally oppose debt relief.
amp.cnn.com
amp.theguardian.com
