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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
Nelnet has been my loan servicer since 2002. I have made more money han the required amount in monthly payments each month and still have a balance of over 5K. I was told by them I didn’t qualify for CARES relief in interest because my account starts with a D. I never knew my loans were privately held as they always show what group they are and department of education for each.
Nelnet is my student loan servicer. I would definitely like to be involved… My school is holding my Bachelors because of Helmet.
I have a Nelnet loan that enforces itself as a federally financed servicer and will never come off my credit report. I certainly need representation with Nelnet.
I have nelnet loans that have been reported late when actually enrolled in school. Misrepresentation and lies. Need loan forgiveness since they are private.
Yes, I would like to be a part of this lawsuit.
I have a Nelnet loan and believe my interest was misallocated. I was misinformed for years about my repayment options including the public service forgiveness option and how to qualify. I have never missed a payment for 18 years very little has come off my principle. I have inquired about this multiple times with very discouraging responses basically telling me there is nothing in an do.
I had nelnet for years until my loan was sold again
Add me.
Please add me
I have a Nelnet Loan, and have told them I could not afford their monthly payment. My loan was consolidated through Nelnet. This has been a monkey on my back for years. Please contact me regarding this loan.