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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
So reading the article just now is telling me nelnet is not under the department of education? For years I have be doing income driven repayment plan I applied one the department of education website .This whole time I believed they were the department of education. In fact I reapplied on Oct. 2nd and it has been pending since. They won’t answer the phone or emails. Now they are reporting to the credit bureau I’m over 90 days late and running trying to figure out how that is when repayment started on October 1st. Never once until now have I been late nor has anything been reported . How can I join the lawsuit.
I just found out that my undergraduate loans are on Neltnets commercial side, and my graduate loans are on the federal side. My undergraduate loans are not eligible for the new SAVE program. I found this out by calling the Department of Education when I called to find out why they were not accepting my income tax return and instead wanted check stubs. I was led to believe that my loans were all federally held. I have been trying to get a hold of Nelnet for almost a month now with wait times of an hour before I have to hang up. My last call was yesterday, and I was on hold for 2.5 hours before I hung up. It seems impossible to get in contact with them to find out what is going on as I was instructed to do so by the Department of Education. My application with submitted income information has now been in processing according to their website when I can login is going on almost two months. Meanwhile all they have no issues with adding interest.
my loans are handled by nelnet. I started with 72k in student debt and after 6 years of repayment, i was at 74 k. I am supposedly getting a “break” by allowing auto debit. some help that is. Now I dont have to think about getting bent over the barrel.
funny, it shows up as the “dept of education” on my statements.
Yes they lie and cheat customers
For two months I have been trying to contact Nelnet. My student loans went from Great Lakes to Nelnet. Today I have been on hold again for now 47 minutes. I am trying to get my payments set appropriately. I have sent them numerous emails, several phone calls and waited between 40-90 minutes each time and never get a representative, etc. And have been unable to get any answers. Any help is appreciated.
Please help. This happened to me too the woman told me there was no interest and it would bring me current 100% and boost my credit score. Then sent me paperwork to sign with the department of education logo on it. Please help the interest is higher than the 1,200 loan! Please contact me.
My student loans transferred from Great Lakes to Nelnet, Inc.. I recently discovered that I may qualify for the student loan discharge because my college no longer exists. My diploma is worthless. Now I am strapped with nearly $80,000 in student loans. I have tried to contact Nelnet on numerous occasions for assistance before the November 1st deadline to apply. I have sent messages through their email portal for my account, as well as tried to contact a loan servicing representative through their chatbot. However, the chatbot sends me through a continual loop, never sending me to a live person. I have called numerous times and sat on the phone for two or more hours and still not receiving a live person to talk with. One day, I waited on the phone until 5:00 PM with my phone connected to my charging cord so it wouldn’t die on me.
Nelnet is a fraud and I have paperwork to show how they acquired a loan to a school I never attended. I was trying to build a better future for myself and my children. Instead I have been paying, income tax refunds taken, threatening letters, phone calls, and bad credit became my life. I have lots of paper work to support my claim. Tried to make sense of why education department would allow fraud to enter our classrooms and ruin so many lives.
I have a Nelnet student loan. They said it was a commercial loan and not qualify for forgiveness. My loan was sold in the past and rules of the loan was not disclosed though they said I knew about the commercial side
I would like to be to the Class action Lawsuit