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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.
Nelnet 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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566 thoughts onNelnet Class Action Lawsuit Says Student Loan Borrowers Are Misled
I have two loans through Nelnet. I would like to be included in this lawsuit.
If Nelnet isn’t federal can we file bankruptcy on those loans ? that would get rid of my largest debt.
Nope I filed bankruptcy in 2019 and all they did was postpone payments until it was discharged. They they charged me back interest. I was making $170 payments it was all going to back interest. I have made over 10K in payments but my loan amount went up by 14k.
I’ve been complaining about my loan with Nelnet for years. I was scammed into transferring my “Parent Plus Loan” over to Nelnet through a company which whom I paid $1,200 in fees too who assured me that my loan would be placed into a forgiveness program after making extremely low monthly payments to Nelnet instead after my payment plan was over I was told by Nelnet that I didn’t qualify for loan forgiveness based on my income which has also caused my payments to be $150 hiigher than my previous loan servicer payments. I’ ve spoken to people in different departments at Nelnet but I’ve never gotten any results or sympathy for my lose of funds or higher monthly payments.
FYI: phone repersentives who have taken my complaints before escalating them to a higher department have admitted to me on several occasions that they’re aware that consumers are being scammed.
I have nelnet loans. Interest fees are accuring during COVID-19
I have a Parent+ loan with Nelnet.
I’m in the U.S. District of Southern Florida, but financed and attended all years of Pharmacy School for Doctorate degree from Nova. Longest story short, I graduated in 2007 w approx ~ $240,000 borrowed in student loans, (which today exceeds total in excess of $330,000+++) according to all dirty tricks and forever-changing calculations continually figured by Nelnet & others, etc.). As such, I too have most certainly also experienced each, every, and all above mentioned problems w Nelnet loan servicer; (NAVIENT is EVEN WORSE – FYI).
My parents took both me and both my sisters loans through NelNet. They have seriously mislead us
Have received several calls and voicemails saying they are from the dept of ed. But are not. I have a nelnet loan from 2008..i owe on. It wasnt nelnet not dept of ed. that was calling me. My last name starts with D but Im not from Florida…
I currently have my student loans, $18,123.71 worth, through Dept. of Ed/Nelnet. My loans were sold to Nelnet by my state around 2016 and at that time I owed $10,850 between the two. One had a balance of $7,424 and the other had a balance of $3,430. The monthly payment and interest rate were outlandish.
Fast forward to the end of 2020 and I now owe an outstanding balance of $19,000.73 and principle balance of $18,123.71. Loan 1 is $12,347.07($91.29 accrued interest) and Loan 2 is $5,776.64 ($785.73 accrued interest) balance. That is $877.02 of accrued interest and $8,150.73 more than what I owed before it was sold to Dept. of ED/Nelnet. And because I saw no other choice but to do a direct consolidation and being led to believe that was in my best interest, I saw no other choice but to chose a payment plan and my payment plan is based on my income rather than loan term. At this rate, I will die owing Dept. of ED/Nelnet.
I filed bankruptcy in 2017 and attempted to file the loans into my Chapter 7 bankruptcy but was told that student loans could not be cleared through a bankruptcy. These student loans and the prior carrier of the student loans prior to Nelnet getting them are still causing me credit issues to this day. And, I still have no idea why they weren’t included in my Chapter 7?!
Before the pandemic I was on an IBR plan. Sadly, I dread to see what Nelnet attempts to do to us once January 2021 rolls around and payments restart from the pandemic freeze.
I am very much interested in being part of this class action suit due to misrepresentation bc when I contacted them to try and resolve the issue originally and after filing my Chapter 7 bankruptcy they talked circles around me telling me this and that. I was confused and felt like I had no real options.
Same here. I owe more now with Nelnet than I did with my previous servicer…
I also went thru Nelnet for my sons tuition. And even thru covid pandemic i am getting fees.