Despite student loan debt now topping $1.7 trillion dollars, the latest case-by-case court records analyzed by the Transactional Records Access Clearinghouse (TRAC) at Syracuse University show that civil suits filed to recover federal student loan debt have become increasingly rare even before pandemic relief provided a collection moratorium.
There were no suits filed in April 2021, and only one during the first seven months of FY 2021 (October 2020-April 2021). That case was filed by the federal government in the Northern District of Texas (Dallas) in U.S.A. v. Lewallen (Case No. 3:2020-cv-3085). In fact, there were more cases (3) in which individuals with student debt sued the U.S. Department of Education this fiscal year than when the federal government took individuals to court[1].
Before the pandemic hit in FY 2019, only 261 federal civil lawsuits for student loan default recoveries were filed nationwide. However, there was an earlier period when federal loan recovery suits were more common. The number of student loan default recovery lawsuits in fact reached 4,335 during FY 2011 following the financial crisis of 2008[2].
Since that peak in FY 2011, there has been a continuous dramatic decline. Figure 1 plots the number of federal lawsuits classified under this nature of suit from FY 2008 through the first seven months of FY 2021. These civil suits generally involve Title 20 Section 1080 on student loan recovery, or Title 28 Section 1345 concerning the default of student loans. Veterans are excluded from these counts.
Figure 1. Federal Suits for Recovery of Defaulted Student Loans
FY 2008 - FY 2021 (through April)
(Click for larger image)
Student Loan Recovery Suits Targeted Some Communities
Lawsuits for recovery of defaulted student loans have been concentrated in a relatively small number of locations across the country. During the entire research period from October 2007 through April 2021, a total of 22,645 such suits were filed. Almost one out of four (22%) was filed in the Central District of California (Los Angeles). There a total of 4,930 lawsuits have been filed during this entire period.
Nearly half (48%) of student loan recovery suits were filed in just three federal judicial districts. In addition to California Central, these were the Eastern District of Michigan (Detroit) with 3,043 such suits and the Southern District of Texas (Houston) where 2,956 cases were filed[3].
Relative to the size of their population, the Eastern District of Michigan led the nation on this litigation with over six times the national average, and nearly twice the Central District of California's rate of student loan recovery lawsuits. The Southern District of Texas was in second place relative to its population size with four times the national average.
The Eastern District of Virginia (Alexandria) and the Eastern District of Texas (Tyler) were tied for last place with the smallest number of student loan recovery suits filed relative to their respective populations.
Table 1 provides a complete accounting of federal student loan recovery suits by the number filed as well as filing rates relative to population size in each of the federal judicial districts within the U.S. Relative rankings are also shown to facilitate comparisons of these 90 districts.
Table 1. Federal Suits for Recovery of Defaulted Student Loans, October 2007 - April 2021
| Federal Judicial District | Lawsuits Filed | Ranking on: | ||
|---|---|---|---|---|
| Number | Rate* | Number | Rate | |
| Total | 22,645 | 5.1 | - | - |
| Cal, C | 4,930 | 18.5 | 1 | 4 |
| Mich, E | 3,043 | 33.6 | 2 | 1 |
| Texas, S | 2,956 | 22.8 | 3 | 2 |
| Fla, S | 1,732 | 17.4 | 4 | 5 |
| Ill, N | 980 | 7.5 | 5 | 6 |
| N. J. | 663 | 5.4 | 6 | 10 |
| N. Y., E | 650 | 5.7 | 7 | 9 |
| Cal, N | 601 | 5.3 | 8 | 11 |
| Fla, M | 538 | 3.4 | 9 | 19 |
| Penn, E | 407 | 5.0 | 10 | 13 |
| Texas, N | 383 | 3.9 | 11 | 17 |
| N. Y., N | 339 | 7.1 | 12 | 7 |
| N. Y., W | 277 | 7.1 | 13 | 7 |
| Texas, W | 272 | 2.8 | 14 | 24 |
| Penn, W | 271 | 5.2 | 15 | 12 |
| Ga, N | 256 | 2.8 | 16 | 24 |
| Ohio, N | 235 | 2.9 | 17 | 23 |
| Arizona | 186 | 1.9 | 18 | 39 |
| D. C. | 172 | 18.6 | 19 | 3 |
| Ohio, S | 143 | 1.7 | 20 | 46 |
| S Car | 140 | 2.1 | 21 | 31 |
| Conn | 127 | 2.5 | 22 | 26 |
| Minnesota | 116 | 1.5 | 23 | 58 |
| N. Y., S | 114 | 1.6 | 24 | 49 |
| N Car, E | 103 | 1.9 | 25 | 39 |
| Okla, W | 99 | 3.4 | 26 | 19 |
| Mo, W | 97 | 2.2 | 27 | 28 |
| La, E | 96 | 4.2 | 28 | 15 |
| Mass | 93 | 1.0 | 29 | 74 |
| Ind, S | 92 | 1.6 | 30 | 49 |
| Fla, N | 90 | 3.6 | 31 | 18 |
| La, W | 89 | 3.0 | 32 | 22 |
| Ala, N | 84 | 2.1 | 33 | 31 |
| Miss, S | 83 | 3.2 | 34 | 21 |
| Mich, W | 83 | 1.7 | 34 | 46 |
| Cal, S | 77 | 1.6 | 36 | 49 |
| Mo, E | 74 | 1.8 | 37 | 42 |
| Maryland | 72 | 0.9 | 38 | 78 |
| Kansas | 71 | 1.8 | 39 | 42 |
| Oregon | 68 | 1.2 | 40 | 70 |
| Penn, M | 67 | 1.5 | 41 | 58 |
| N Car, M | 65 | 1.6 | 42 | 49 |
| N Car, W | 62 | 1.4 | 43 | 65 |
| Okla, N | 59 | 4.0 | 44 | 16 |
| Ind, N | 56 | 1.5 | 45 | 58 |
| Tenn, E | 54 | 1.5 | 46 | 58 |
| Wash, W | 54 | 0.7 | 46 | 85 |
| Nebraska | 53 | 2.0 | 48 | 37 |
| Ala, S | 52 | 4.4 | 49 | 14 |
| Iowa, S | 52 | 2.1 | 49 | 31 |
| Ken, W | 52 | 1.7 | 49 | 46 |
| Tenn, W | 49 | 2.2 | 52 | 28 |
| Idaho | 49 | 2.1 | 52 | 31 |
| N Mexico | 47 | 1.6 | 54 | 49 |
| Tenn, M | 47 | 1.4 | 54 | 65 |
| Wisc, E | 47 | 1.0 | 54 | 74 |
| Ill, S | 43 | 2.4 | 57 | 27 |
| Ken, E | 42 | 1.4 | 58 | 65 |
| Wisc, W | 42 | 1.3 | 58 | 68 |
| Ark, E | 40 | 1.8 | 60 | 42 |
| Cal, E | 40 | 0.4 | 60 | 87 |
| Iowa, N | 39 | 2.1 | 62 | 31 |
| Ill, C | 36 | 1.2 | 63 | 70 |
| New Hamp | 34 | 1.8 | 64 | 42 |
| Nevada | 34 | 0.8 | 64 | 81 |
| Montana | 32 | 2.2 | 66 | 28 |
| Miss, N | 30 | 1.9 | 67 | 39 |
| Maine | 30 | 1.6 | 67 | 49 |
| Hawaii | 30 | 1.5 | 67 | 58 |
| R. I. | 29 | 2.0 | 70 | 37 |
| Ark, W | 28 | 1.5 | 71 | 58 |
| Ga, S | 27 | 1.2 | 72 | 70 |
| W Virg, S | 26 | 2.1 | 73 | 31 |
| Ga, M | 26 | 0.9 | 73 | 78 |
| Utah | 26 | 0.6 | 73 | 86 |
| Ala, M | 25 | 1.6 | 76 | 49 |
| Virg, W | 23 | 0.8 | 77 | 81 |
| Wash, E | 18 | 0.8 | 78 | 81 |
| Colorado | 18 | 0.2 | 78 | 88 |
| Okla, E | 17 | 1.6 | 80 | 49 |
| W Virg, N | 17 | 1.3 | 80 | 68 |
| Alaska | 15 | 1.5 | 82 | 58 |
| Wyoming | 13 | 1.6 | 83 | 49 |
| Delaware | 13 | 1.0 | 83 | 74 |
| La, M | 12 | 1.0 | 85 | 74 |
| N Dakota | 11 | 1.1 | 86 | 73 |
| S Dakota | 10 | 0.9 | 87 | 78 |
| Virg, E | 9 | 0.1 | 88 | 89 |
| Vermont | 7 | 0.8 | 89 | 81 |
| Texas, E | 7 | 0.1 | 89 | 89 |
* Number per million population.
Footnotes
[1] So far during FY 2021 suits involving student debt repayment were filed against the U.S. Department of Education in the Central District of California (Case No. 2:2020-cv-11025), and in the Southern District of Ohio where two suits were filed (Case Nos. 2:2021-cv-562 and 2:2021-cv-988). Individuals also filed two suits against Equifax Information Services, LLC et al. and one suit against Ascendium Education Group, Inc. et al.
[2] See earlier May 2012 TRAC report discussing this peak.
[3] See earlier November 2018 TRAC report tracking similar trends for each of these districts.
Each month, TRAC offers a free report focused on one area of civil litigation in the U.S. district courts. In addition, subscribers to the TRACFed data service can generate custom reports by district, office, nature of suit or federal jurisdiction via the TRAC Data Interpreter.
