NorthStar Student Loan Borrowers Owed Money in Settlement

By Sarah Pierce

If you took out a student loan from NorthStar Education Finance, you may have some money owed to you.

A judge approved a class action settlement last week that requires the Minnesota-based company to pay borrowers nearly $10 million for failing to pay a repayment bonus as promised. The class action suit was filed after NorthStar suspended a bonus program called “T.H.E. Repayment Bonus” in February 2008. The program offered a monthly credit to borrowers that equaled an annual interest-rate deduction of 0.75 percent if their repayments were no more than 59 days late. The plaintiffs allege that NorthStar’s suspension of the bonus program was a breach of its loan contracts as well as an unfair and deceptive trade practice.

The deadline to opt out of the settlement has passed, so if you have (or had) a qualifying NorthStar student loan you are automatically included in the settlement. According to the Minneapolis Star Tribune, the average payout will be about $81 per person. It’s not much, but when you’re repaying student loans every little break helps.

More information about the class action settlement can be found at: www.northstarloansettlement.com

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Updated April 14th, 2010

All class action and lawsuit news updates are listed in the Lawsuit News section of Top Class Actions

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