Brian White  |  September 18, 2020

Category: Education

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college student frustrated with Nelnet student loan debt

Nelnet faces a class action lawsuit alleging the lender falsely represented affiliation with the U.S. Department of Education, violating federal and state debt collection laws in regards to student loans.

The plaintiffs in the case say representatives from Nelnet misled them to believe their Nelnet loans were backed by the federal government but in fact were not. 

The lead plaintiff in the case, Kimberly Isner-Monticello, filed the class action lawsuit after learning the CARES Act’s deferment of payments would not apply to her Nelnet student loans.

Isner-Monticello says she’s a licensed attorney living in Florida. She allegedly financed her tuition through Nelnet, eventually earning her Juris Doctor degree from the Stetson University College of Law.

The plaintiff claims defendants left her to believe the Nelnet student loans were federally held. 

“Throughout the time NelNet services the loans, it would represent to Plaintiff that it was associated with the United States Department of Education,” according to the class action lawsuit. 

The Nelnet class action lawsuit contends that this kind of messaging left Nelnet student loan borrowers to believe their loans were federally held. The plaintiff points to a specific voicemail left in April. 

That message began with the greeting, “this is Nelnet calling on behalf of the United States Department of Education,” Isner-Monticello said. Her belief that her loan was federally backed was “reasonable” as a result, the class action lawsuit claims.

image of student loan debtNelnet representatives went on to explain to the plaintiff why these loans do not fall under CARES Act provisions. The loans were owned privately by a “bank, credit union or other lender” but not the federal government.  

“Clearly, the language involved in the voicemail is inaccurate, as the United States Department of Education has no involvement with the Plaintiff’s Student Loans,” the plaintiff said. 

The class action lawsuit further claims that Nelnet violates both the Fair Debt Collection Act and Florida’s Consumer Collections Practices Act by “by threatening to collect a debt when such person knows that the debt is not legitimate and asserted the existence of some other legal right when such person knows that the right does not exist.” 

Even more, the plaintiff alleges that Nelnet representatives were “falsely representing the character, amount, and legal status of the debt in question.”

The class action lawsuit claims damages in this case. Isner-Monticello “has lost work time while calling and inquiring as to her CARES Act deferment when it was not available.”

There are some $130 billion worth of private student loans in the U.S., according to the Student Borrower Protection Center. That report describes the growing privately-held debt as “an amount greater than the payday loan market and the total outstanding balance of past-due medical debt.”

“The private student loan market has less transparency, fewer mechanisms for oversight, and a smaller scale of substantive protections for borrowers than other areas of consumer finance,” the report from the Student Borrower Protection Center claims. 

The class action lawsuit seeks to form a Class that contains “All student loan borrowers in the Middle District of the US District Court in the State of Florida who have NelNet account numbers that start with the letter D, who were left voicemails alleging that Defendants are calling on behalf of the United States Department of Education re­lating to that loan.”

“The exact number of members in the Class is presently unknown, can only be as­certained through discovery, and can easily be identified through Defendants’ records or by oth­er means,” according to the class action lawsuit. 

Do you have Nelnet Student Loans? Let us know in the comments below. 

Counsel for the plaintiffs in this case are from Owen & Dunivan PLLC. 

The Nelnet Student Loan Class Action Lawsuit is Isner-Monticello, et al. v. Nelnet, Inc. et al. Case No. 8:20-cv-02135-MSS-TGW, in the U.S. District Court for the Middle District of Florida.

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563 thoughts onNelnet Class Action Lawsuit Says Student Loan Borrowers Are Misled

  1. David O Jones says:

    hi my name is David Jones and I have been trying to log in to my account with Nelnet for months and could not get in to my account. i try calling and it say that my information do not match. I call and talk with some one back in oct. 2023 about my payment because that gave me difference payment. I just want to start paying my student loan back.

  2. Hailey says:

    I have been getting emails for months saying that my loans are connected to the Department of Education and that my loans will be sent to collectors. However, I’ve spent hours on the phone trying to talk to someone with no luck, and the Nelnet site just shows a technical error message every time I try to log in, regardless of what browser, device, or time of day I choose to try to access it.

  3. Barry Dwayne Davis says:

    Myself and my wife both have Nelnet student loans and until seeing this, I always thought these were associated and backed by federal, not private.

  4. Renee Belonga says:

    I would like someone TO CONTACT ME REGARDING THIS CLASS ACTION LAWSUIT. IM IN MICHIGAN,AND THEY HAVE REALLY MESSED UP MY LOANS. PLEASE, PLEASE CONTACT ME, THIS IS NOT FAIR, ABD I CANNOT GET ANY ANSWERS FROM NELNET, OR FROM THE DEPARTMENT OF EDUCATION!!!!!!!

  5. Renee Belonga says:

    Yes, and I cannot believe this is who the Dept of Education appointed to take over my Great Lakes loans!! They have my loans all messed up, and I intend to join a lawsuit, as soon as one becomes available.

  6. Martha C Camus says:

    I ahve Nelnet Graduate student loans, how can I sign into this class action

  7. Patricia Kulcsar Rhoads says:

    Pd off great Lakes and Nelnet this year (past) No one answers me. Please help but need to have paper stating how much interest paid as well as Nelnet

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