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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
Settlement Website
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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28 thoughts onSallie Mae Collection Fee Class Action Lawsuit Settlement
Why is this only in California?? If they did it in that state, why wouldn’t they do it in other states?
I have a Sallie Mae loan, and I would like to join this lawsuit.
I live in Michigan
I have a Sallie Mae loan. And I would like to join this lawsuit there any in Arizona? .
This makes me want to SPIT! These people are crooks! I am in Michigan, and therefore cannot file after going broke trying to pay off loans from Sallie Mae. I was harassed on almost a daily basis by these people. I have been waiting for a suit against them for years! So angry that I can’t participate. this should be a NATIONAL SUIT. So mad.
Where can i file for this. I was in MN when i got this loan to go to school. They put my loan as a private loan instead of a student loan so i cant claim any of what I paid in interest. I got my loan in 2007 for 17,500 @ 8.25% . At the same time I had gotten another school loan thru self loan and never had this problem and ,im able to claim interest and it actually under a student loan. I have paid over $15,900 my balance is at $13,900 still after paying on this since 2008. I nver barrowed anymore and i have paid over $8,800 in interest and only around $7000 in the principal. My payment is around $200 a month and they take half in interest. When i called they told me that i was being charged 8.25% average of $3 per day about $90-$95 a month in interest charges,which is complete and utter crap. As a single mom putting myself thru school and they screw me complety over. They said my loan will be paid off in 2024 that mean i will have paid for this loan for 16 years. Something is seriuously wrong with that. By they time im done i will have paid almost $19,000 in interest alone. I want to file a lawsuit this has me so upset i just wanna be done with this loan.
Due to hardship my loan is more than what I started with 5years ago. I tried working with them and talking to them. Even sent letters to them in hopes to bring balance back down to what I started at, at least.