if such adjustment is discretionary with the loan servicer
I think what will happen in this case is that the Dept of Education will give guidance to the loan servicer to adjust per borrower request. It won’t be discretionary with the loan servicer. The loan servicers are under contract to the Department and follow guidance given. They might request some kind of contract change request and more $$ but I’m sure the Department of Education will grant all that in order to make the lawsuit go away.
But I agree that the federal government will undertake any amount of additional lawless acts to try to salvage this one.