Sallie Mae Must Compensate Troops $60 Million For Overpaid Student Loans
Thursday, May 15, 2014
Sallie Mae must pay $60 million in refunds to troops for violating a law, called the Servicemembers Civil Relief Act, that ensures members of the U.S. military pay no more than six percent interest on student loans.
U.S. Attorney General Eric Holder said not only did Sallie Mae charge an illegal interest rate to some troops, but in some cases the lender obtained default judgments against members of the military who fell behind on their student loan payments:
"By requiring Sallie Mae to compensate its victims, we are sending a clear message to all lenders and servicers who would deprive our servicemembers of the basic benefits and protections to which they are entitled: this type of conduct is more than just inappropriate; it is inexcusable. And it will not be tolerated."
UPI reports Sallie Mae began overcharging loan fees in 2005, often to active duty troops while they were deployed to Iraq and Afghanistan.
In addition to the $60 million in restitution paid to military members, NBC reports, Sallie Mae must also make amends to troops whose credit scores were damaged by the student loan company:
Sallie Mae is required to ask all three credit bureaus to delete negative credit histories service members had as a result of the unfair lending, and to simplify the process for service members to receive the interest rate reductions they deserve in the future.
Finally, Sallie Mae has been ordered to pay about $37 million in penalties to the FDIC, according to Boston.com.
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