Sallie Mae class action settlement

A federal judge has approved a class action settlement between Sallie Mae Inc. and consumers who say the company unlawfully tacked on a 25 percent collection fee to defaulted student loans. If you were assessed and/or paid this fee while living in California, you may be eligible to receive a refund.

Who’s Eligible

Class Members of the Sallie Mae collection fee settlement include all persons in California who, within the period from July 13, 2006 through May 31, 2013, were assessed and/or paid a Collection Cost Assessment in connection with a private education loan serviced by Sallie Mae, as identified by Sallie Mae from its records using its best efforts.

You will be considered “in California” if: 1) you were assessed a Collection Cost Assessment during the Class Period while residing in California, or 2) you were a California resident at the end of any month during the Class Period in which any payment was applied to your Collection Cost Assessment.

Potential Award

Varies. Under the terms of the class action settlement, the fees paid by Class Members will be retroactively reduced to 8.75 percent at the time of charge-off, and will remain in effect for the life of the outstanding loan.

For borrowers who have paid off their loans, Sallie Mae will refund the difference between the amount of collection costs paid beyond the 8.75 percent rate and the amount that it wrote off in principal, interest and other fees, excluding collection costs. If the amount of collection costs paid in excess of 8.75 percent is less than the amount Sallie Mae wrote off, the borrower will get a $40 refund.

Proof of Purchase

None.

Claim Form Deadline

N/A. Class Members will automatically receive settlement benefits if the class action settlement is approved.

Case Name

Angelo Bottoni, et al. v. Sallie Mae Inc., et al., Case No. 3:10-cv-03602, in the U.S. District Court for the Northern District of California, San Francisco Division

Case Summary

The Sallie Mae collection fee settlement resolves a 2011 class action lawsuit (Bottoni v. Sallie Mae Inc.) that claims these fees were illegal because they were imposed on defaulted loans that were handed over to third-party collection agencies – before Sallie Mae ever incurred them. In total, Sallie Mae assessed nearly $117 million in these allegedly improper collection fees between 2006 and 2010, according to the class action lawsuit.

Sallie Mae denies the allegations but has agreed to shave off $76 million in debt owed by over 40,000 California borrowers by refunding these consumers the fees they paid.

If you wish to participate in the class action settlement and receive a refund, you do not have to take any action. You will automatically receive the relief described above if the Court grants final approval to the settlement at the November 21, 2013 Final Fairness Hearing.

If you wish to exclude yourself or object to the settlement, you must do so by October 7, 2013.

Final Hearing

11/21/2013

UPDATE: The Court granted final approval of the Bottoni, et al. v. Sallie Mae, Inc. class action settlement at the Final Fairness Hearing. Pursuant to the terms of the settlement, Sallie Mae plans to adjust Class Members’ accounts by Feb. 22, 2014 and arrange for the distribution of settlement checks to qualifying Class Members by March 19, 2014

Claims Administrator

Bottoni v. Sallie Mae, Inc. Administrator
c/o KCC Class Action Services
P.O. Box 43199
Providence, RI 02940-3199
Administrator@BottoniClassAction.com
1-855-330-5248

Class Counsel

Ray Gallo
Dominic Valerian
GALLO LLP

Defense Counsel

David Hartsell
MCGUIRE WOODS LLP

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20 Comments

  • Aisha Hall September 6, 2013

    I got some loans from Sallie Mae and want to apply for this lawsuit.

  • Laverne Vanlow September 7, 2013

    I got a loan from Sallie Mae and will like to apply for the lawsuit

  • Laverne Vanlow September 7, 2013

    I got. a loan from sallie mae and will. like to apply for. the lawsuit

  • Pamelia September 9, 2013

    I got a loan from sallie maeand will like to apply for the lawsuit.

  • Dia September 9, 2013

    confused about this lawsuit

    Initial line says to submit a claim form to KCC class action Services

    Then it says that there is no claim process.

    Could you please clarify this? What form, if any needs to be submitted for a claim as the webpage has no “claim form” link. Do we just send a letter stating we want to participate or be included ?

  • Susan Clawson September 9, 2013

    I have loans and parent plus loans with Sallie Mae

  • Carolyn Ober September 10, 2013

    Sallie Mae,inc… Servicing DOE ffel loan(s) Shocking? No. As a parent whom continually seeks “answers” of students loan upon Sallie Mae,inc grants TPD discharge due to medical condition which could result in death! Private student loan were “paid” to be in forbarence only to be default and, DEBT collection calls, Allied Interstate,LLC debt settlement near $10,000.00 ONLY upon parents filing federal taxes, YES… A Federal US Dept of ED Tax Offset!
    I’m appalled at DOE regulations not inforced upon Sallie Mae,inc SLM Corp, for their lack of “record” keeping or online accounting information! Upon seeking documentation of this fraudulent ffel loan, Sallie Mae, Advocates “actually” send 6 weeks later after documents requested of course, a letter which “STATES”
    Thank You for your business with Sallie Mae 9/22/2010. Your request to defer payments on your student loan(s) * below have been approved for deferment begins on 12/01/2009 thru 10/03/2013.
    Thank you Sallie Mae,inc for your continued support of our Future College Graduates!
    Yeah, how many others have been lied or given fraudulent,forged accounting MPN in Cincinnati?

  • Linford Simpson September 10, 2013

    I have loan with sallie mae and was surprize about the way they process to customers.

  • ZeeBee September 13, 2013

    This is bullshit…Sallie Mae fucked me over, added so many fees, charges, interests, PLUS took over my government subsidised and unsubsidised loans and made $45,000 worth of loans in to well over $100,000 and THIS particular lawsuit is ONLY for California residenses….they should be sued, closed down, and burned at the steak. I hate Sallie Mae, may their business parish and they go straight to Hell…bc that is where they belong.

  • Portia Mcginnis Bake September 20, 2013

    I recieved a loan from Sallie Mae and will submit to this claim

  • Ewana Elmore Cardoza September 27, 2013

    I have had loans in the pass but I dont remember when my loan was forgiven.I am disabled.

  • MELINDA AIESI October 8, 2013

    I have Student Loans from Sallie Mae. But don’t know where to file a claim.Where do I go to file a claim against Them?

  • Shawn Jajo October 10, 2013

    Hello
    I have had Salliemae loans for several years and pay towards my balances and notice the loan amounts are not accurate and get charged all kinds of fees and am never able to resolve the matter with them. I noticed this is only for California residents.. Is there a salliemae class action lawsuit available for Michigan residents?
    Thanks
    Shawn

  • CHARLES BROWN October 15, 2013

    APPLICATION FOR Sallie Mae Collection Fee Class Action Lawsuit Settlement

  • Debra Burch October 28, 2013

    I had a Sallie Mae loan and cannot pay it down, I would like to join the class action law suit.

  • Donna Hays November 5, 2013

    I’d be very interested in a Class Action Lawsuit against Sallie Mae AND USA FUNDS since I’ve paid $8300 in principal alone and I only borrowed $3600 and still owe $1200, per their records.
    If any action starts up PLEASE count me in. I’m considering a social media buzz to count just how many people would like to consider the option. I think it would gain speed quickly since there are millions of us.

    • carolyn January 21, 2014

      Donna,

      I would be “more” than happy to help stir up a media buzz to make Sallie mae,inc SLM Corp, USA Funds, Nellie Mae, Nelnet and her well renound name changing liars of lenders…. be held accountable for “failure to disclose”, FULL LOAN ACCOUNT INFORMATION WHEN PRIVATE STUDENT LOAN DEFAULT AFTER student was granted TPD thru Sallie Mae, as guarantor of Federal loans an account numbers for private loans are thw same account number for Federal loan that WAS discharged an collected upon from Parent co signer as well!!!!
      Sallie Mae,inc SLMA prvt credit mgmt corp & Allied Interstate,llc Iqor have Not heard the last of ME!
      Again… where or will there ” truth in lending” ever be held accountable?!?

  • R Scott Montgomery November 7, 2013

    Is this for the State of California only??? I am in Texas and paid a large sum of fees.

  • Britany Virga November 10, 2013

    At the rate sallie may charges I will never be able to pay off my loans!

  • dorothy redmond November 23, 2013

    why didn’t i recevied a notice in the mail on the settlement on sallie mae i know i have paid ed my son loan off and they are stinning takeing money out of my check every month can someone tell me what to do.i need my money dorothy redmond 140@yahoo.com p o box 246 lexington ms. 39095

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