$3.25M student loan class action over prepayment settled

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ACS Education Services class action overview: 

• Who: ACS Education Services has made a $3.25 million settlement deal with student loan borrowers.
• Why: The settlement would end claims the company failed to provide required certificates to student loan borrowers after informing them they could prepay their loans at any time.
• Where: The proposed settlement was filed in a New York federal court

Student loan lender ACS Education Services has agreed to a $3.25 million settlement with borrowers to end claims it made false promises about the terms of its student loans. 

In a memorandum filed by a certified class of student loan borrowers July 22 in a New York federal court, the borrowers asked the court to approve the deal.

Plaintiff Jeffrey Chery said in the memo that the deal with Conduent Education Services—which does business as ACS—is an “excellent” result for the class. 

Claims first filed in 2018

The borrowers first filed the class action lawsuit against ACS in 2018, alleging it “deceptively informed” borrowers issued loans under the Federal Family Loan and Education Program (FFLEP) that they could prepay their loans “at any time,” including through consolidation. 

However, when student loan borrowers submitted requests to consolidate, the company allegedly did not timely provide loan verification certificates that were necessary to facilitate the requests.

“Plaintiff claims this left borrowers unable to consolidate and avail themselves of federal benefits, including under the Public Service Loan Forgiveness program.”

The settlement would benefit all student loan borrowers who submitted an application to consolidate one or more loans under the FFLEP into a direct, consolidated loan since Jan. 18, 2012, but didn’t receive a loan verification certificate within 10 days. 

Chery said the class includes nearly 3,000 borrowers. Class members who have claims of less than $750 will automatically receive a cash award from the net settlement amount without needing to submit a verification. Those with claims greater than $750 must submit a timely and valid verification to receive a cash award.

Chery is seeking a service award of $25,000, while his lawyers are seeking up to about a third of the settlement fund.

Meanwhile, in January, one of the country’s largest student loan companies Navient inked a $1.85 billion deal to settle claims it preyed on students to write loans that saddled them with crushing debt that was near-impossible to pay off.

Just a few months later, in June, the U.S. Department of Education (DOE) agreed to a class action settlement which will cancel the student loan debt of around 200,000 students whose claims had been stalled. 

Have you had problems with your student loan provider? Let us know your experience in the comments! 

The plaintiffs are represented by Fletcher W. Moore and Justin A. Kuehn of Moore Kuehn PLLC and Lawrence P. Eagel of Bragar Eagel & Squire PC.

The Conduent Education Services Class Action Lawsuit is Chery v. Conduent Education Services LLC et al., Case No. 1:18-cv-00075, in the U.S. District Court for the Northern District of New York.

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