Who Can File a Sallie Mae Student Loan Class Action Lawsuit?

In a recent Sallie Mae student loan class action lawsuit, the plaintiff was able to obtain a settlement of her claim of negligent lending practices by settling with the Department of Education. The Department of Education has been routinely discovered to be liable in claims of false advertising via their direct mail campaigns, their websites, and even their signage. As a result, the Department of Education has taken responsibility for the actions of their agents.

Sallie Mae Student Loan Class Action Lawsuit

However, in one case currently before the courts, the plaintiffs are claiming that they were not informed that a settlement offer was available until four months after the lawsuit had been filed. During this period, the plaintiff was unable to make payments due to financial hardship. At the time of filing the lawsuit, she was living on a fixed income. As a result of the delay in receiving her notification of settlement, the defendant in the case filed suit against her.

The plaintiffs argue that this is an example of Sallie Mae engaging in conduct described as predatory lending.

In this case, the plaintiff’s attorney, Robert T. Jackson, claims that the delay in notification of the settlement was intentional. According to Mr. Jackson, “Ms. Mae was well aware of the risk of her loan class action lawsuit; however, the defendants deliberately avoided giving her notice until after the case was filed and it was too late to do anything about it.” Mr. Jackson further contends, “The defendants’ refusal to give her notice amounts to negligence on their part.” A District Court Judge has ordered the parties to mediation and is expected to rule shortly.

In reviewing this case, I find that the delay in providing the notice of settlement to Ms. Mae was not only an attempt at negligence, but also an attempt to save face.

In my professional opinion, this is a classic case of a litigant trying to ride out an issue until the time is right to take their dispute to court. If Ms. Mae had been properly notified of the impending Sallie Mae student loan class action lawsuit, there is a strong possibility that the lender would have been forced to file a motion for summary judgment. That would have resulted in a very short court trial which would have been very costly for both sides. As you may see from the above article, there is a large financial incentive for lenders to avoid this type of case, so that’s why you’ll often see them seek to have a Sallie Mae student loan class action lawsuit delayed.

One might ask what is the benefit to a lender for having this type of case to settle rather than go to trial. The answer is fairly simple. It ensures a favorable outcome for the lender, because if the plaintiff wins the class action lawsuit, they usually receive a significant amount of money. Additionally, they are likely to receive even more money if they successfully move the case out of state.

The final category of plaintiffs who find themselves behind on their payments and wish to join the Sallie Mae student loan class action lawsuit are those who find themselves behind by several months but can demonstrate that they only owe a portion of their debt and are eligible for a federal consolidation loan.

In most cases, these types of plaintiffs will be able to move forward with a settlement as long as they can provide proof of their eligibility for a federal loan consolidation program. However, if they can’t provide such proof, they should proceed with a trial in federal court. In fact, those who prefer to pursue a lawsuit are strongly advised to do so because a federal judge is likely to side with the bank.

In addition to the possibility of receiving a large check from a court judgment, some plaintiffs receive settlements from the bank themselves.

There is a specific type of settlement referred to as a cross-settlement. In this type of transaction, the bank takes one claim and settles it with another party. In most instances, plaintiffs have the right to bring cross-settlements with other banks. However, it’s not unusual for banks to resist plaintiffs’ attempts at settlements, often stating that they would never accept such claims.

Those who wish to learn more about the details of the Sallie Mae student loan class action lawsuit should speak with an attorney experienced in such cases. This lawsuit provides a unique opportunity for students to obtain the help they need from an attorney and to receive the compensation they deserve. With so much riding on the outcome of this case, it’s imperative that those filing suits fully understand the procedures governing their lawsuit. If you’re looking for a way to receive compensation, this case may be the best way for you to go about it.

3 Comments
  1. I had a 12,000 student loan through Sallie Mae back in the early 2000s and just paid it completely off a couple of years ago. But at the time I was a single mom struggling and they had put me in forbearance many of times and not told me in the begging they report it to the Credit people. Towards the end of my payments/ years later they stated that yes they do send to credit people but it does not change the score it only puts my loan on hold showing no payment so it will be ok. Lie. I found out every time they put me on forbearance and extended the length/time me it dropped my score dramatically. I had trouble renting houses/apartments/financing cars because of this. Thank God for the nice people that would look past and give me chance. So am I eligible since the loan is paid off now?

  2. I also am a single mother and had a loan back in the 2000s I had a hard time paying bill and kept trying to make arrangements for payment and became delinquent. The only solution I was offered after that before Covid was payoff plans. $9000.00 in something like 3 payments. Like I could afford that. I just called today and Navient today and since I was in default, I have to at least make payments of 2×750.00 3×500 to get me out of default. Should I wait to see what happens in lawsuit? I haven’t even received any type of notice.

  3. I have been calling Sallie Mae because I fit in the years of when the whole borrowing scandal occurred (2010-2014) and they act like they don’t know what I am talking about. They keep saying to call Navient but I have never gotten a loan from them; all my loans were through Sallie Mae in school. Does anyone know who to contact to see what is going on?

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