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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
Sign me up for the class action suit regarding Nelnet. I too was misled into thinking Nelnet was affiliated with the DOE. My student loans were also transferred from the DOE to Great Lakes to Nelnet private loan collector without my knowledge. The first email I received from Nelnet claimed they’d report my loans. (in good standing) to all creditors. I’m appalled!
I also applied for Government assistance back in 2009/2010. I was also led to believe that Nelnet was a government held entity.
My loan was transfered from Great Lakes to Nelnet without my consent as well. I definitely have issues knowing their practices. I would like to be included in the class action as well.
Please go forward with this class action suit against nelnet. I too, have been paying since 2002 and the loan is at the same amt. Since 2002!! The same happened with my Stafford loan being sent to nelnet and now being told to consolidate again because nelnet is not the Education Dept. Plus, the consolidation will negate the ability for the student loan cancelation. How, ridiculous, this is because nelnet has stated that after 20 years of payments the loan is automatically cancelled for the undergraduate degree. The absurdity of a U S State, admitting that their State (Missouri) can’t function on its own autonomy, it’s own ability to create it’s own funding and way of life, without keeping others in a deep, never-ending abyss of financial Debt is MONSTROUS!!!
I have Nelnet
I have student loans with nelnet it’s outrageous everything that has transpired with this company. Would like to be able to get in the class action law suit against nelnet they have wronged so many
I was still making payments on my student loan during Covid, I recently called NELNET to request a refund, I was told my loan was not eligible due to it being a commercial loan. NELNET took over my federal student loan from 2007.
Nelnet stole my money all through COVID no interest deferment. I kept paying to try to lower the principle balance. NOT ONE PENNY went toward Principle balance. Nor interest that I could see either. Screen grabs show they received my payments, but then nothing went toward anything as stated above.
Makes you question how many other payments through the years of paying they just pocketed as well. ….
Nelnet has been reported for fraudulent behavior more than once now.
I left them because enough was enough.
However, Nelnet still owes me the money I paid in.
Nelnet took over my loans in 2022 without my consent
I have Nelnet
I’m am in the same boat, instead of owing one payment to Nelnet, I owe several monthly, each the size of car payments. I thought these we were government loans.