LINCOLN, Neb., May 22, 2019 /PRNewswire/ -- A national class
action against one of America's largest student loan companies will
go forward.
The United States District
Court for the District of Nebraska
(Hon. John M. Gerrard, Judge) issued
a ruling on May 22 holding that
Jessica Olsen of Oregon and Teri
Smith of Florida may
proceed with their national class action case.
Olsen and Smith allege that Nelnet, Inc. of
Lincoln breached student loan
contracts and promissory notes held by the company, and are
requiring an accounting from the company for its breaches.
The students' lawyer, David
Domina of Domina Law Group pc llo in Omaha, NE said the Court's ruling for the
Plaintiffs is "consistent with a clear federal legislative intent
[expressed at 20 USC 1082] to make
companies in Nelnet's business financially responsible for their
misconduct."
Domina Law Group represents Olsen and Smith along with
Anthony Fiorentino, Cassandra Miller and Dan
Edelman of Chicago, IL.
The 23 page Court ruling allows four of the students' six claims
to go forward against Nelnet. In 2018, Nelnet described
itself in connection with an acquisition.
Domina and his colleagues filed the Olsen lawsuit in
June 2018 (Case No. 4:18-cv-03081).
They sued for two separate classes of student borrowers. One class
borrowed funds more than five years before suit was filed and used
an IDR Plan which was not processed correctly by Nelnet. The second
class consists of students who fall into a separate legal
category with different features to change lending terms. Each
class is "composed of tens to hundreds of thousands of individuals
and thus are so numerous" as to require that they be dealt with in
a class action. (Am Compl Filing # 37, p14).
Ms. Olsen and Ms. Smith contend their student loans, serviced by
Nelnet were mismanaged and that this caused them to lose available
privileges to pay the loans at lower interest rates and on more
favorable terms. They allege Nelnet breached contracts with the
government made to help students, and made misrepresentations about
what had to be done by students to take advantage of favorable loan
options.
Nelnet, Inc. shares trade on the New York Stock Exchange under
the symbol "NNI". The company operates more than 50 subsidiaries
from its headquarters in Lincoln.
The stock was lower in trading on Monday and Tuesday after the
ruling.
In a May 8, 2019 PR Newswire
Release, Nelnet was described as operating "four primary business
segments, earning interest income on loans in its Asset Generation
and Management segment and fee-based revenue in its Loan Servicing
and Systems; Education Technology, Services, and Payment
Processing; and Communications segments."
The same press release identified "the company's average balance
of loans in the first quarter of 2019 [as] $22.3 billion compared with $21.9 billion for the same period in 2018."
Forbes' Zack Friedman called student debt a $1.5 trillion crisis and "now the second highest
consumer debt category - behind only mortgage debt - and higher
than both credit cards and auto loans."
As of the time of this release, Nelnet has not reacted to the
court ruling.
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SOURCE Domina Law Group pc llo