A $10 million class action lawsuit settlement is being considered after one of the nation’s largest student loan repayment pipelines was hit by a data security incident.
The case stems from an August 2022 cyberattack on Nelnet, which provides student loans and also provides a web portal and payment processing technology to other servicers.
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Plaintiffs allege that the breach exposed sensitive data including names, addresses, email addresses, phone numbers, and social security numbers for more than 2.5 million student borrowers at Oklahoma Student Loan Authority (OSLA) and Edfinancial.
Affected individuals can claim up to $5,000 as long as they can provide documented evidence of out-of-pocket losses directly attributable to the data security incident.
The lawsuit, filed in Nebraska, accuses Mr. Nelnet of negligence, per se, breach of implied contract, unjust enrichment, breach of confidence, invasion of privacy, and violation of the state’s consumer protection and notification laws.
Nelnet, OSLA and Edfinancial dispute the allegations and deny any violations of law. They say they have a favorable defense and would prevail if the case continued, but agreed to settle to avoid the expense and uncertainty of further litigation.
Claims must be submitted online or by mail by March 5th, which is the deadline to opt out or appeal. A final approval hearing will be held on May 5th.
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