Loan Servicer Can Compel Borrower To Arbitrate

In Neal v. Navient Solutions, LLC, the Eighth Circuit Court of Appeals reversed the lower court, holding that a student loan borrower’s claims against the loan servicer must be arbitrated even though the servicer was neither a party to the loan agreement nor specifically referenced by the terms of the loan agreement.

The agreement provided for arbitration of claims brought by the borrower against the lender “and its successors and assigns, and any other holder of this Agreement.” The loan servicer did not specifically fit this definition but, as an agent of the assignee of the note, the appellate court nonetheless determined that arbitration was appropriate.

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