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NextStudent Loan Payment Class Action Lawsuit
By Matt O’Donnell
A federal class action lawsuit has been filed against student loan lender NextStudent, student loan servicer Affiliated Computer Services (ACS) and U.S. Bank alleging they improperly credited loan payments to “extract more interest” from student borrowers.
Plaintiff Cindy Breitman alleges in the class action lawsuit that the companies “kept borrowers trapped in student loan debt that borrowers were actively seeking to repay as fast as possible to lower the total cost of borrowing.”
According to the NextStudent class action lawsuit, the Defendants misapplied prepayments (loan payments received in excess of the stated monthly amount due) made through ACS’s Checkmate II in order to keep borrowers in debt, “ignoring borrowers’ express instructions as to how prepayments should [be] applied to borrowers’ loans.”
Instead of putting prepayments toward the borrower’s principal balance, ACS applies them to the next monthly installment and to prevent the next month’s automatic debit through Checkmate II. This is misleading, the class action lawsuit says, because the terms and conditions for Checkmate II say: “Please note that prepayments, defined as additional payments received on your loan(s) greater than the regular installment or the amount due, will not satisfy installments or prevent the next month’s debit.”
This is deceitful because it hides from borrowers “the manner in which prepayments would be applied to their loans,” the class action lawsuit says.
Breitman also accuses the NextStudent, ACS and U.S. Bank of falsely promising borrowers that if they made 36 consecutive loan payments they would qualify for an “On-Time Payment Benefit,” which included a 1-percent rate reduction.
Breitman is seeking class certification and treble damages for breach of contract. She is represented by the law firm Bragar, Eagel and Squire.
Updated August 31st, 2012
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10 thoughts onNextStudent Loan Payment Class Action Lawsuit
These NextStudent psychos are dangerous! I have concerns that they’re torturing and murdering people! Seriously. I’d never leave a comment like this!
Does anyone read these?
NextStudent and the ASA stated that I consolidated my student loan. when i finally received a copy from a collection company 4 years ago from the collection company, I had never seen the “Loan Consolidation paper” and never signed it. I finally received a copy of the consolidation contract with every name for references spelled incorrectly, wrong address, the list goes on. I asked the USDOE/ASA for a copy of the authenticated “Digital Signature” and their response was sorry they we were not able to contact them and they provided no conduit to your session, what ever the hell that means….I have no idea . please tell me how I can get added to this class action suit.
How do you get added to this? I’ve been making more than my minimum payments for months with ACS insisting on applying them to future interest despite explicit instructions not to do so. These guys are less professional than payday lenders.
I would also like to be added to this lawsuit! I paid off my student loan in Feb 2009. ACS kept saying they never received the payment. I sent it certified so I know they got it. It has been turned over to a collection agency and now they took my tax check to pay the past due amount. Can someone please help me on figuring out how to get in on this lawsuit?
I would also like to be included in this Class action suit, please notify me if this is possible. I have kept all my records & feel that ACS has inappropriately handled my loan. To make a long story short, I originally had a Federal Loan and consolidated after graduating with a new lender, that lender passed my loan down to Chase Loans. Then Chase sold my perfectly good standing loan to a new institution (CFS, who has not becom ACS??) about 2 years ago (approx. the end 2008 beginning of 2009). I received a letter from Chase letting me know that it was sold and that my new lender would contact me with all my new information (totals, rates, billing information etc) . Months went by and I heard nothing from CFS/ACS I had no loan details, totals, interest rates nor even an address where I could make a payment too. Come Jan 2012 they started sending me statements with no information on my actual loan, I start making payments while I investigated to avoid any delinquencies on my credit. After several payments, I began to notice that the loan total was not going changing/reducing. So I contact them to ask them why this was and their out-of country phone representatives couldn’t provide me with a clear/legitimate answer, nor a loan total nor an interest rate! I have been emailing back and forth with these people and still have not been able to get a complete answer. I’m more the willing to pay what is due on my loan; however I don’t think it’s fair that I should be held accountable for the interest accrued over those 2 years that they failed to contact me. Nor that they took my overpayments sent and applied it to future interest like many people have encountered with CFS. In addition the limited information I have doesn’t coincide with my totals.
I would like to enter this class action lawsuit against ACS. I have been repaying loans from them since 2009, and have made more than the minimum payments consecutively for quite some time, yet owe $2.5k more than my original loan amount today.
Ditto. I graduated in 2003 and have a record of paying over the minimum amount for years, yet they apply my overage payments to interest and the principal never goes down. I consolidated a private loan and a Sallie Mae loan with them because the loans with Wells Fargo had a variable interest rate that kept going up. In the 3 years with Wells Fargo, even going from 7% to over 11%, my principal went DOWN. I have multiple letters and faxes asking how I can designate additional payments to go to the principal and have never received an answer. All I get is the mantra “we apply payments first to principal.” Well, if you make a payment over and above the monthly payment within a week or so of making the monthly payment, wouldn’t it stand to reason that it should not all go to interest? I would love to fly to their home office with cash in hand and pay off the loan. Those crooks would apply the $49k to interest and tell me I still have a $49k balance.
I need help badly against Next Student/Xpress Loans. Back in 2006 I graduated from college and received several mail flyers about consolidating my loan. I received phone calls from several places, I told them all that I did not want to consolidate because it would increase what I owe. However Next Student/Xpress Loans consolidated my loan without my permission and used a pin number to sign my loan. I did not authorize them to do this, now AES is saying I defaulted on my loan, they charged me default fees and collections fees and I have mailed and called them about this but everytime I do I get the same thing you have to pay so much per month (which I do not have) and that is it. Help me please.
I really need help!!!! im unemployed from a workplace injury (received no workmans’ comp benefits) and my payment will increase to 600. for a total of 800.
help