Nearly $100 million dollars — that’s how much student loan company Sallie Mae and its affiliates will soon be paying out to military service members for alleged deceptive lending practices.
Two separate settlements were announced Tuesday. One for $60 million with the Justice and Education Departments, another for $37 million with the FDIC.
Sallie Mae, along with Sallie Mae Bank and former loan servicer Navient Solutions, Inc. had been accused of charging U.S. service members more than the capped 6 percent interest rate they were promised.
Attorney General Eric Holder said in a press conference, “[This] is the least we owe our brave service members who make such great sacrifices for us. This type of conduct is more than just inappropriate; it is inexcusable. And it will not be tolerated.” (Via Department of Justice, Flickr / Obama-Biden Transition Project)
Businessweek reports the alleged illegal practices dated back to at least 2005 and may have affected an estimated 60,000 service members. Those service members will reportedly receive compensation from the payout.
Sallie Mae will also be responsible for contacting all three major credit bureaus and asking them to delete damages to credit history related to the overcharges.
According to Navy Times, Sallie Mae and Navient did not acknowledge any wrongdoing in the settlement, but did agree to its terms.
