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Members of the American Federation of Teachers, the second largest teachers union within the U.S., filed a lawsuit against Navient, one among the the nation’s largest student loan servicers.

If you’ve got a student loan, there’s an honest chance that it’s going to be serviced by Navient. Navient, which spun faraway from Sallie Mae, has quite 12 million customers and services quite $300 billion of state and personal student loans.

The rulings altogether three of those cases do have some limitations. First, the courts have limited these rulings to affirmative misrepresentations, or active efforts by a student loan servicer to mislead borrowers about their rights, options, or obligations. Other sorts of misrepresentation – like omissions, or just not telling borrowers about all of their options – could still be pre-empted by federal law. Second, the choice is merely binding in each circuit court’s jurisdiction. and eventually , the choices in these cases only allow the lawsuits to proceed; no final rulings are issued against the servicers, or in favor of student loan borrowers, and no damages have yet been awarded.

However, this decision signifies growing movement in federal courts towards allowing state law-based legal claims against federal student loan servicers. With positive decisions now from three different circuits, more federal courts can cite to binding precedent allowing these sorts of lawsuits to proceed. Momentum is continues to create in favor of student loan borrowers.

The Illinois lawsuit accuses Navient of misleading student loan collection practices. Navient gave the borrowers false information about their options so they cannot get out of the default. There is the Federal Student Loan Rehabilitation Program which was made to help students who fell behind on payments to help them get back on track and carry on repaying their loans without additional interests. There are certain cases where a student cannot repay her loan. The reason might be injury, unemployment or other financial difficulties. Navient always tried to make sure that students never get out of the default by giving them deceptive information. The Federal Student Loan Rehabilitation Program was already very confusing, and Navient took advantage of it and made it harder for its borrowers.

What I am about to tell you might sound a bit crazy but in case the Navient lawsuits are accepted, and you successfully get your loans discharged or forgiven you will have one last problem to solve which is the tax. When you receive loan forgiveness, the IRS considers it a taxable income. For example, if you owed 20,000 US dollars to Navient which is now forgiven, you might owe IRS about 4 to 6 thousand dollars. The worst thing is that the IRS will demand the whole amount right away without giving you a chance of paying it monthly. But that should not make you devastated because there is and will be a lot of borrowers like you who will owe money to the IRS and it can also be resolved just like Navient loan forgiveness depending on the situation.

Therefore, decisive steps towards solving student loans crisis should be celebrated because this problem is finally getting the attention it deserves. All the current and prior students who have taken student loans from Navient, whether they finished the repayment program or not should keep following the news about Navient lawsuits because there is a chance that Navient loan forgiveness program will offer massive payouts in case the Navient lawsuits prove to be successful.

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