Sallie Mae SUED! Pays 97 Million in Fines — Overcharging and Excessive Fees

Sallie Mae Sued For Overcharging on Student Loans-

College grads, rejoice. Your prayers for student loan forgiveness may have been answered. Call  (844) 236-3332 for more information.

Sallie Mae and the federal government struck a deal to resolve accusations that the nation’s largest student loan lender cheated student loan borrowers who were being charged pricey late fees. According to Sallie Mae Bank, it will pay “$3.3 million in fines and oversee the refund of up to $30 million in late fees.”

In addition, the Consumer Financial Protection Bureau investigated whether the company violated federal consumer protection laws that prohibit discriminatory lending, while wrongfully processing borrowers’ monthly payments. Sallie Mae was ordered to pay $96.6 million in restitution and penalties. Because of the never-ending charges and hefty fees, it’s become increasingly difficult for college grads to pay off student loan debts, causing a lifetime of financial obligations to the lender.

Navient, formerly part of  Sallie Mae, created repayment obstacles for tens of thousands of student borrowers by providing incorrect payment information, processing payments incorrectly and failing to act when borrowers complained, according to the federal lawsuit filed.

The company also cheated borrowers out of their rights to lower repayments, according to the CFPB lawsuit, which seeks financial relief for student borrowers who were harmed. Call 844-236-3332 for more information.

“For years, Navient failed consumers who counted on the company to pay back their student loans,” said CFPB Director Richard Cordray. “At every stage of repayment, Navient chose to shortcut and deceive consumers to save on operating costs.”

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The Justice Department has ordered Sallie Mae to pay $60 million in restitution and a $55,000 penalty in a settlement that needs court approval. In a separate case, the Federal Deposit Insurance Corp. has ordered the company to refund troops up to $30 million in late fees assessed on loans and imposed a $6.6 million civil fine.

Eligible service members will be contacted by an independent administrator who will distribute compensation.

All but $3.3 million of the fines will be paid by Navient, the student-loan servicing company that was spun out of Sallie Mae last month. Under the terms of the separation, which was initiated last May, Navient absorbed Sallie Mae’s liabilities and 95 percent of its assets, including servicing rights to nearly $300 billion in student loans.

Neither Navient nor Sallie Mae admitted or denied wrongdoing. But the chief executives of both companies apologized for the harm done to service members.

Call us at (844) 236-3332 for more information.

“Once that review is complete, we will use the information to determine what appropriate actions — if any — should be taken against Sallie Mae’s contract with the federal government,” Education Secretary Arne Duncan said at Tuesday’s news conference.

Duncan did not rule out terminating the department’s contract with Navient, an agreement that is set to expire in June.

He said that the Federal Student Aid office will also comb through the records of the 10 other loan servicers, including Great Lakes and Nelnet, to make sure they are not charging  more than the 6 percent interest permitted by the law. About $717 billion in federal student loans are managed by servicers, with American Education Service overseeing the largest portion of the portfolio.

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Source:

http://www.justice.gov/opa/pr/nearly-78000-service-members-begin-receiving-60-million-under-department-justice-settlement

 

Comments (20)

  • Franklin TovesApril 1, 2016 at 5:11 pm Reply

    Lender ACS should be looked into also. Before I deployed I requested a rate decrease. The lady told me I couldn’t.

    • The Staff @ CLASSJanuary 11, 2017 at 11:46 pm Reply

      Hi Franklin…..they typically say they “can’t”, but in most cases they can. Have you received any help with this?

  • Stephanie OldakerApril 6, 2016 at 8:38 pm Reply

    My private loans through Sallie Mae are in default and now I’m paying through a collection agency. Is there any forgiveness available for them?

    • The Staff @ CLASSJanuary 11, 2017 at 11:46 pm Reply

      With private loans it is a little more tricky. These types of loans require a sort of refinance option in which credit is needed and in most cases if your loans are defaulted, your credit has been effected.

  • Bettye Faulkner-RidleyApril 18, 2016 at 4:58 pm Reply

    With all the interest I will never pay off my loans completely.

    • The Staff @ CLASSJanuary 11, 2017 at 11:45 pm Reply

      Hi Bettye. Do you know if the loans are private or federal?

  • Luke calipApril 26, 2016 at 5:20 pm Reply

    Does this apply to me if I haven’t started paying ? How does this work

    • The Staff @ CLASSJanuary 11, 2017 at 11:44 pm Reply

      Hi Luke. When are your payments due?

  • Lisa GreenJuly 26, 2016 at 8:35 pm Reply

    I hope ACS student loan servicer is next. They have been charging me over 6% interest and charging me late fees and charges even though i have been paying them.

    • The Staff @ CLASSJanuary 11, 2017 at 11:44 pm Reply

      Hi Lisa. ACS is defiantly a servicer we work with. Have you received any help with this?

  • Nancy McGrottuAugust 4, 2016 at 4:51 pm Reply

    I am a 68 year old retiree. I received notice that they are going to withhold my social security if I don’t send them $26,000. I live check to check as it is now. I do not like being in default but I do not have that kind of money. Do I qualify for loan forgiveness!

    • The Staff @ CLASSJanuary 11, 2017 at 11:43 pm Reply

      Hi Nancy. Were you able to receive any help?

  • Melvin Bill Daniels JrSeptember 20, 2016 at 9:38 pm Reply

    Fully disabled at the time of loans, and was told they would be forgiven due to me being disabled. Navicat insist that is not possible, information they are requesting not available in Texas through SSI.

    • The Staff @ CLASSJanuary 11, 2017 at 11:42 pm Reply

      Hi Melvin. Are these private or federal loans?

  • Mavis Elaine KjarySeptember 21, 2016 at 4:56 pm Reply

    I have paid over $10,000 already !!!

    • The Staff @ CLASSJanuary 11, 2017 at 11:42 pm Reply

      Yikes! Are you still paying on this debt? Is it federal?

  • Joel L Gilmer/Malissa GilmerSeptember 27, 2016 at 5:29 pm Reply

    This debt is upon my son Joel L. Gilmer back in 2003-2004. I do co-sign but with written promise that he would pay back loan. the original loan was $10,000 not it’s about $30,000. I’m unemployed and have $0 income. I have written to the collection companies asking for debt forgiveness.

    • The Staff @ CLASSJanuary 11, 2017 at 11:41 pm Reply

      Hello Joel. Did you receive the help you needed?

  • Kathie CrouseFebruary 22, 2017 at 7:09 pm Reply

    Any help for old loans. I graduated in 2000. Didn’t make enough to make payments way back then. Have now not worked in 13 years. So still in deferment. Interest racking up. I’m a stay at home, Homeschooling mom (they say I don’t qualify for teacher forgiveness). Would love ideas.

    • The Staff @ CLASSMarch 9, 2017 at 10:36 pm Reply

      Hi Kathie. Please feel free to call us and we can discuss some great alternatives.

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