Read

Error message

Notice: Undefined index: base_url in include_once() (line 125 of /home3/occupyco/public_html/dev/sites/default/settings.php).

User menu

Search form

For $100M, Sallie Mae Settles Military Student Loan Violation and Late Fees Scam

For $100M, Sallie Mae Settles Military Student Loan Violation and Late Fees Scam
Thu, 5/15/2014 - by Associated Press
This article originally appeared on Associated Press

Student lender Sallie Mae has reached a $60 million settlement with the Justice Department to resolve allegations that it charged members of the military excessive interest rates on their student loans, the federal government announced Tuesday.

The deal settles a government lawsuit that asserted the student loan giant violated the rights of service members by imposing interest rates above the 6% permitted by federal law and by improperly seeking default judgments against them.

Separately, the Federal Deposit Insurance Corporation announced a settlement of $30 million in restitution arising from allegations that the company maximized consumer late fee charges, as well as $6.6 million in civil penalties.

The lawsuit was the Justice Department's first against owners and servicers of student loans for violating rights of service members. The settlement has been filed in federal court in Delaware and is awaiting a judge's approval.

"We are sending a clear message to all lenders and servicers who would deprive our service members of the basic benefits and protections to which they are entitled: this type of conduct is more than just inappropriate; it is inexcusable," Attorney General Eric Holder said at a news conference. "And it will not be tolerated."

Education Secretary Arne Duncan said all students who have taken out federal loans "should have the peace of mind" that they will be treated fairly. He also said he has requested a review into whether Sallie Mae violated its contact with the Education Department through the overcharging practices.

Federal officials estimate that roughly 60,000 service members will be eligible for compensation as part of the settlement.

Sallie Mae spun off its loan servicing operation on April 30 into a separate entity known as Navient Corp.

"We offer our sincere apologies to the servicemen and servicewomen who were affected by our processing errors and thus did not receive the full benefits they deserve," Navient president and CEO John Remondi said in a statement. He said the company has made changes to "prevent these mistakes from happening again."

As part of the deal, Sallie Mae would also be required to ask the three major credit bureaus to delete negative credit histories resulting from the overcharges. The company has also agreed to streamline the process by which active duty service members can go about receiving loans.

[via Associated Press]

3 WAYS TO SHOW YOUR SUPPORT

ONE-TIME DONATION

Just use the simple form below to make a single direct donation.

DONATE NOW

MONTHLY DONATION

Be a sustaining sponsor. Give a reacurring monthly donation at any level.

GET SOME MERCH!

Now you can wear your support too! From T-Shirts to tote bags.

SHOP TODAY

Sign Up

Article Tabs

prison reform, incarceration rates, private prisons, for-profit prisons, white supremacy, enslavement, climate justice, racial justice, Green New Deal

The year 2020 has caused many white people to realize we live in a racist system. The Green New Deal is about systemic change for all, and deconstructing racism must be front and central in this agenda.

coronavirus pandemic, Donald Trump, Boris Johnson, Jair Bolsonaro, COVID-19 deaths, downplaying coronavirus

By infecting three of the world’s most right-wing leaders, the coronavirus underscored not only the incompetence and irresponsibility of their governments – but the truth that their brand of populism doesn't keep people safe.

COVID-19, corporate bailouts, corporate welfare, corporate destruction

Corporations are not "too big to fail" and, when they commit crimes, they are not "too big to jail." As David Whyte writes in his new book, "Ecocide: Kill the Corporation Before It Kills Us," the moment is now to rein in out-of-control corporate power.

The world has lost an incredible thinker and doer. I have lost an amazing friend. A void exists where before it was filled with David's optimism, humour and joy.

Kevin Zeese speaks at a rally for Chelsea Manning. By Ellen Davidson.

Kevin fought to bring truth every day. We must not lose this struggle.

prison reform, incarceration rates, private prisons, for-profit prisons, white supremacy, enslavement, climate justice, racial justice, Green New Deal

The year 2020 has caused many white people to realize we live in a racist system. The Green New Deal is about systemic change for all, and deconstructing racism must be front and central in this agenda.

coronavirus pandemic, Donald Trump, Boris Johnson, Jair Bolsonaro, COVID-19 deaths, downplaying coronavirus

By infecting three of the world’s most right-wing leaders, the coronavirus underscored not only the incompetence and irresponsibility of their governments – but the truth that their brand of populism doesn't keep people safe.

COVID-19, corporate bailouts, corporate welfare, corporate destruction

Corporations are not "too big to fail" and, when they commit crimes, they are not "too big to jail." As David Whyte writes in his new book, "Ecocide: Kill the Corporation Before It Kills Us," the moment is now to rein in out-of-control corporate power.

The world has lost an incredible thinker and doer. I have lost an amazing friend. A void exists where before it was filled with David's optimism, humour and joy.

Kevin Zeese speaks at a rally for Chelsea Manning. By Ellen Davidson.

Kevin fought to bring truth every day. We must not lose this struggle.