Fishman Haygood Secures Nationwide Preliminary Injunction for Putative Class of Debtors Pursued by Creditors Over Dischargeable Student Loans

On May 7, 2025, the Hon. Elizabeth S. Stong (U.S. Bankruptcy Court, Eastern District of New York) granted a nationwide preliminary injunction on behalf of Tashanna Golden and a similarly situated putative class ordering Firstmark Services, LLC and the Pennsylvania Higher Education Assistance Agency (PHEAA) to cease collection efforts on certain student loans. The loans at issue include (1) those made in excess of the cost of attending a Title IV institution and/or (2) those used for certain postgraduate expenses. The Court determined that not only are these loans likely dischargeable under the scope of the debtor’s bankruptcy filing, but also that a loan servicer’s relentless collection efforts undermine the Bankruptcy Code’s fundamental principle of providing a “fresh start,” posing a threat to both discharged debtors and to public interest. Click here to read the full decision and order.

In February 2016, Ms. Golden filed for Chapter 7 bankruptcy relief. After receiving a discharge, Ms. Golden filed a motion to reopen her case seeking to determine the dischargeability of her student loan debt. The first loan at issue, a National Collegiate Student Loan Trust (NCT) loan serviced by PHEAA, exceeded Ms. Golden’s cost of attendance at the University of Pennsylvania Law School, a Title IV institution. The second loan in question, issued by Citibank and later serviced by Firstmark, was used to fund Ms. Golden’s living expenses while she studied for the bar exam.

In January 2017, Ms. Golden commenced adversarial proceedings seeking a “determination that certain debts that she incurred as a student are not nondischargeable student loans under Bankruptcy Code Section 523(a)(8)(B).”

According to Bankruptcy Code Section 523(a)(8)(B), a debtor is obligated to repay debt on “qualified education loans,” defined by the Internal Revenue Service (IRS) Code Section 221(d) as any indebtedness incurred solely to pay for qualified higher education expenses. Unless repayment causes undue hardship, this includes overpaid educational loans made under any program funded, in whole or in part, by a governmental unit or nonprofit institution (Bankruptcy Code Section 523(a)(8)(A)(i)).

In the complaint, Ms. Golden argues that her student loans are dischargeable because they do not meet the IRS’s definition of qualified education loans. First, since the NCT loan exceeded the cost of attending a Title IV school, the IRS no longer considers it a qualified education loan. Next, the Citibank loan was issued to cover living expenses after Ms. Golden graduated from Penn Law as opposed to funding costs associated with attending the Title IV institution. Finally, Ms. Golden states that both loans were only guaranteed by The Education Resource Institute (TERI), which is neither a governmental unit nor a bona fide nonprofit institution.

Since filing her complaint nearly a decade ago, Ms. Golden asserts that the defendants have continued collection efforts on her dischargeable debt until recently.

Significantly, Judge Stong found that Ms. Golden’s arguments would either likely succeed on the case’s merits or would sufficiently raise serious questions regarding its merits, clearing the way for litigation regarding the scope of Ms. Golden’s bankruptcy discharge. Further, the order reinforces previous bankruptcy court rulings that the public interest is neither served by collecting on discharged debt, nor is it disserved by enjoining such collection.

Fishman Haygood attorneys Jason Burge, Kaja Elmer, and Lara Richards represent Ms. Golden and the putative class in the complaint against Firstmark and PHEAA. Boies Schiller Flexner LLP attorneys George Carpinello and Adam Shaw serve as lead counsel on the case. Lynn Swanson of Jones, Swanson, Huddell, LLC and Joshua Kons of the Law Offices of Joshua B. Kons, LLC serve as co-counsel.

This is not the first time that Fishman Haygood has pursued claims against student loan servicers for predatory collection efforts on dischargeable loans. In 2023, the firm reached two nationwide settlements with Navient Solutions, LLC and Navient Credit Finance Corporation that resulted in $236 million in debt relief for private student loan borrowers, as well as $44 million in cash compensation. Read more about that litigation here.

Fishman Haygood represents both plaintiffs and defendants in class action and mass action litigation, both in Louisiana and across the nation. Click here for more information.