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A federal judge has ruled that a class action lawsuit against Sallie Mae can proceed over allegations that the lender charged “unreasonable” collection fees of 25 percent on student loans that had entered default before turning the defaulted accounts over to debt collectors.
The Sallie Mae class action lawsuit was filed by four plaintiffs who took out private student loans through Sallie Mae’s Signature Student Lending program between 2002 and 2004 to attend the California Culinary Academy in San Francisco. The four class members claim Sallie Mae added a collection charge of 25 percent to their loan balances and reported the loans to third-party debt collectors, who then tried to collect the principals, interest and the 25-percent charge. One of the plaintiffs paid collection costs of at least $2,000 for her two loans.
U.S. District Judge Laurel Beeler rejected Sallie Mae’s argument that the class needed to be more specific in its allegations that the collection costs were unreasonable. She also threw out Sallie Mae’s argument that the plaintiffs must show losses of money or property eligible for restitution.
Judge Beeler did dismiss, however, two of the class’s claims of unfair charges under the Consumer Legal Remedies Act and unfair debt collection practices under the Rosenthal Act since the students could not prove their Sallie Mae loans were goods or services, or that Salle Mae itself unfairly attempted to collect on debts.
The plaintiffs have 28 days from the date of the order, February 11, to file an amended complaint. A copy of the court’s opinion on the Sallie Mae class action lawsuit can be read here.
Updated February 18th, 2010
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2 thoughts onSallie Mae Collection Fee Class Action Proceeds
I went to school at Sanford Brown in Collinsville Illinois for a little bit as well as Lewis n Clark community college in Godfrey Illinois and both times I had to go through sallie Mae. I had to pay them both times and one of them they took my entire income tax check to pay my loans off. I was told to file a claim and have it looked into further due to this lawsuit. I’m hoping someone can help me and reach out to me for help with this especially if I can get my money back due to what they took
Sallie Mae Collection Fee Class Action Proceeds
hi everybody, can somebody please tell me how to get on the sallie mae collection fee class action suite. i can`t figure out how it all works. any help will be very greatly appreciated. i have been robed by sallie mae somethin awful. thans much, joe