A $10 million class action settlement is on the table after one of the biggest student loan servicing pipelines in the United States suffered a data security incident.
The case stems from an August 2022 cyberattack on Nelnet, which services 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 the sensitive data of more than 2.5 million student borrowers of Oklahoma Student Loan Authority (OSLA) and Edfinancial, including their names, addresses, email addresses, phone numbers and Social Security numbers.
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 was filed in Nebraska and accused Nelnet of negligence, negligence per se, breach of implied contract, unjust enrichment, breach of confidence, invasion of privacy, violations of state consumer protection and notification statutes.
Nelnet, OSLA and Edfinancial dispute the allegations and deny violating any law. They say they have meritorious defenses and would prevail if the case proceeded, but agreed to settle to avoid the expense and uncertainty of further litigation.
Claims must be filed online or by mail by March 5th, with the deadline for opt-out or objection on the same day. The final approval hearing will happen on May 5th.
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