If you're struggling to keep up with your student loan payments, you're not alone. Student loan giant Nelnet is now facing a class action lawsuit that claims the company systematically miscalculated monthly payments for borrowers enrolled in income-driven repayment (IDR) plans. This could mean that thousands of borrowers are being overcharged every month, and their credit scores may be paying the price.
The lawsuit, filed by West Virginia resident Amanda Stevens, alleges these miscalculations not only make it difficult for borrowers to meet their repayment obligations but also negatively impact their credit scores.
Income-driven repayment plans are designed to be a lifeline for struggling borrowers, offering manageable monthly payments based on their income and family size. However, Stevens alleges that Nelnet is failing in its duty to accurately calculate these payments, leading to inflated bills and financial hardship for countless borrowers.
As the lawsuit puts it, "Nelnet is grossly overcalculating the monthly amount due each month, making it impossible for borrowers to comply with their repayment obligations."
But the damage doesn't stop there. According to the complaint, Nelnet is then reporting these inflated payments to credit bureaus, falsely portraying borrowers as delinquent and damaging their credit scores.
"The inflated, false monthly payments due reflect negatively on Plaintiff’s and similarly situated consumers’ credit profile and deter lenders from considering them for loan opportunities," the suit argues.
Stevens' complaint details her experience with Nelnet regarding her student loans. Enrolled in a SAVE plan with a $35,000 loan balance and a gross monthly income of $5,833.32, Nelnet allegedly calculated her monthly payment to be over $1,969. According to the lawsuit, 10% of her actual monthly income would be much lower at $583.
Despite Stevens disputing the charges, Nelnet allegedly failed to properly investigate and continued reporting the inaccurate information to credit reporting agencies like Experian, Equifax, and Trans Union. The complaint claims that Nelnet "permitted factually inaccurate payment amount information to be reported on Plaintiff’s account," even after placing her account in forbearance for review.
Additionally, the lawsuit alleges that Nelnet continued to verify the inaccurate information with credit bureaus, even after Stevens disputed the miscalculated payments and the company placed her account in "administrative forbearance" for recalculation.
This isn’t the first time Nelnet has found itself in hot water. In January 2024, the student loan servicer agreed to a $1.8 million settlement for allegedly failing to properly communicate with borrowers about maintaining access to affordable payments. The Massachusetts Attorney General’s investigation revealed that Nelnet sent faulty notices to those enrolled in Income-Driven Repayment (IDR) plans.
As part of the settlement, Nelnet agreed to pay $1.8 million to the state and vowed to comply with federal notice requirements for IDR plans. Additionally, they promised to adopt business practices that make it easier for borrowers to continue making affordable payments.
In the Nelnet student loan class action lawsuit, Stevens is seeking to represent consumers across the nation, with a spotlight on borrowers in West Virginia. These are individuals who have had, or currently have, student loans serviced by Nelnet, and who have experienced the company's inaccurate payment calculations for income-based repayment plans.
Stevens' lawsuit is not just about fixing the numbers—she’s fighting for real change. The suit demands injunctive relief to overhaul Nelnet’s payment calculation system and ensure accurate reporting to credit bureaus. On top of that, Stevens is seeking monetary damages for herself and all affected borrowers
Case Details
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