A former Trump student-loan official calls for at least $100,000 to be returned to borrowers who faced ‘unfair’ credit reporting

• A former Trump student-loan official is leading a lawsuit against the administration’s debt collection efforts.
• The lawsuit accused Trump and credit reporting bureaus of unfair credit reporting.
• It comes after Trump resumed collections on defaulted student loans in May after a five-year pause.

A former Trump official is taking legal action against the administration over its treatment of student-loan borrowers who miss payments.

At the end of October, A. Wayne Johnson — who oversaw the federal student-loan portfolio during President Donald Trump’s first term — launched a class action lawsuit with Georgia-based law firm Cooper, Barton, & Cooper, against the Department of Education and credit reporting firms Equifax, Experian, and TransUnion.

The lawsuit was filed on behalf of four borrowers who said they were falsely recorded as having defaulted on their loans and struggled to receive help from the department, and others similarly affected.

It accused the department and the credit reporting firms of “willful violations” of the Fair Credit Reporting Act that have “forced millions of borrowers into reported serious delinquency and even wrongful default, destroyed their financial futures, and extracted billions of dollars” from borrowers by marking them as delinquent without providing sufficient aid to enroll them in repayment plans.

Specifically, the lawsuit said that a decline in servicer capacity, mass layoffs at the department, and a lack of proper funding have contributed to a wave of improper defaults. Johnson said in a video that the relief the class action seeks includes $100,000 returned to each member and the removal of all negative credit reporting from borrowers’ credit reports.

An Education Department spokesperson said the lawsuit is “an embittered attempt by ideologues” to change the way the administration collects student loans. An Equifax spokesperson said the company does not comment on pending litigation, and Experian and TransUnion did not respond to a request for comment from Business Insider.

In May, the department resumed collections on defaulted student loans after a five-year pause. Linda McMahon, Trump’s education secretary, wrote in an April opinion piece that the collections restart wasn’t intended to “be unkind to student borrowers.”

“Borrowing money and failing to pay it back isn’t a victimless offense,” McMahon said. “Debt doesn’t go away; it gets transferred to others.”

About 5 million borrowers are in default, and the New York Federal Reserve’s quarterly report on household debt and credit found that 10.2% of student borrowing was in serious delinquency in the second quarter of 2025, putting borrowers a step closer toward defaulting and facing wage garnishment or other penalties. Default typically happens after 270 days of missed payments.

Borrowers who were declared as seriously delinquent or in default since January 1, 2025, and are interested in joining the class action lawsuit can submit their information here.