“Sallie Mae participating in predatory loan practices is shocking”, said no one ever!
The Justice and Education Departments announced that a settlement of $60 million had been reached with loan financier Sallie Mae for overcharging the military too much interest over their student loans. The lawsuit had been filed under the Servicemembers Civil Relief Act and the $60 million sum will be split-up between 60,000 servicemembers the Justice Department estimates.
The settlement alleges that Sallie Mae wasn’t providing military members with the six percent interest rate cap for student loans that the law entitles them to. According to claims from the Justice Department, this practice was going on since 2005. Along with the $60 million settlement, Sallie Mae will also have to notify credit agencies to delete negative credit history that may have occurred do to the overcharging interest.
While it’s great that the Justice and Education Departments were on top of this when it was brought to their attention, it’s troubling that Sallie Mae was doing this for so long – really, since 2005!?!? – with no one really knowing about it. Considering Sallie Mae’s past history of lending practices, this probably won’t be the last you hear of them. For once anyway, justice looks to have been done for the servicemembers who were only trying to get a higher education. So at least that’s something to celebrate about.