By Michael Stratford
Published 10/30/2025 08:22 PM EDT|Updated 10/31/2025 12:29 PM EDT
The lawsuit was filed on behalf of a proposed class of more than 5 million student loan borrowers and seeks more than $500 billion in damages.
The Trump administration and the nation’s largest credit bureaus are illegally damaging the credit reports of millions of student loan borrowers who default on their debt, according to a new lawsuit funded by President Donald Trump’s former student loan chief.
The proposed class-action lawsuit, filed this week in federal court in Atlanta, accuses the Education Department of unfairly and inaccurately reporting millions of federal student loans to credit bureaus in violation of the Fair Credit Reporting Act.
The case is funded by A. Wayne Johnson, who oversaw the federal government’s $1.6 trillion student loan portfolio as the Education Department’s student aid chief during Trump’s first term. More recently, Johnson last year was the Republican nominee for Congress in Georgia's 2nd district, where he unsuccessfully challenged longtime Democratic Rep. Sanford Bishop.
The complaint argues that major failings at the Education Department over the past year – including understaffing and loan servicing problems – are sending borrowers into delinquency and default through no fault of their own and then unfairly dinging their credit history.