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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, too have had my loans switched to Nelnet and would like to be included in this lawsuit.
Yes, and I would like to be included in this suit.
I want to join this lawsuit . I. have Nelnet loans and have battled them to no avail over IDR, account balances and morePlease help!!!
student loans bought from AES and great lakes a total disaster..Need to seek legal direction.
Does anyone have the information to join this lawsuit?? Please. I have been caught up in the fraud of the perverse company as well and want to get more information somehow-but can’t seem to find anything that leads me to the actual lawsuit and being able to get involved. Thanks!
Yes, my loans were with Great Lakes Student Loan borrowing and now they are with Nelnet. I know that the status of the debt was falsely reported and they were discharged.
I’m still considering what my options are. My case is distinct because Nelnet (collectively Firstmark and Nelnet) acquired a Corinthians-pushed private loan of 2006 which used misleading representation from the start and didn’t even pay out to me by the company. The company is violating credit reporting acts and has violated the character status of the debt. I have already spent so much time and was mislead by the company that it wasn’t statute barred when it was. I have not received refunds of payments I was mislead to make made nor monetary compensation nor restitution. Instead the company is misreporting and defaming my reputation by reporting me as late. I strongly believe that the alleged private 2006 debt is barred by statutes from collection activity. They further misreported the status of the debt for years when it was current(because of my being mislead to pay). I’ve applied for employment requiring good credit and this company has caused me harm. I’d be interested on a contigency basis with a fair percentage or individual consult and if no agreement probably would have to remain Pro Se.
i am having an issue with nelnet and trying to contact them about my student loan. The website is inaccessible and the phone lines have large wait times. I would like to know if I am eligible to join the class action suit.
Same thing happened to me. I have tried to contact them for days and hours each day trying to set up a repayment plan. My user name and password no longer work and I have yet to receive anything from them in the mail. I was googlung how to contact when I came across this article. I was first contacted by them through phone then mail.
Nelnet has bought my student loan from America Educational Services, and it has increased to $42,000.00