$3.25M student loan prepayment class action lawsuit settled
Overview of the ACS Education Services Class Action:
- Who: ACS Education Services has reached a $3.25 million settlement agreement with student borrowers.
- Why: The settlement would end allegations that the company failed to provide required certificates to student borrowers after telling them they could prepay their loans at any time.
- Where: The proposed settlement has been filed in federal court in New York
Student lender ACS Education Services has agreed to a $3.25 million settlement with borrowers to end allegations that it made false promises on the terms of its student loans.
In a memorandum filed by a certified class of student borrowers July 22 in federal court in New York, the borrowers asked the court to approve the deal.
Plaintiff Jeffrey Chery said in the memo that the deal with Conduent Education Services, which does business as ACS, is a “great” outcome for the class.
Applications first filed in 2018
Borrowers first filed the class action lawsuit against ACS in 2018, alleging that “misleadingly informed” borrowers made loans under the Federal Family Loans and Education Program (FFLEP) that they could prepay their loans “at any time”, including by consolidation.
However, when student borrowers submitted consolidation requests, the company reportedly failed to provide the necessary loan verification certificates in a timely manner to facilitate the requests.
“Plaintiff says this prevented borrowers from consolidating and availing of federal benefits, including under the Public Service Loan Forgiveness Program.”
The settlement would benefit all student borrowers who have submitted an application to consolidate one or more loans under the FFLEP into a direct consolidated loan since January 18, 2012, but who have not received a loan verification certificate. within 10 days.
Chery said the class includes nearly 3,000 borrowers. Class members with claims under $750 will automatically receive cash compensation from the net settlement amount without having to submit verification. Those with claims over $750 must submit valid and timely verification to receive a cash reward.
Chery is asking for a $25,000 service award, while her attorneys are asking for up to about a third of the settlement fund.
Meanwhile, in January, one of the nation’s largest student loan companies, Navient signed a $1.85 billion deal to settle claims, he went after students for loans that burdened them with crippling debt that was almost impossible to repay.
A few months later, in June, the US Department of Education (DOE) agreed to a class action settlement which will cancel the student loan debt of approximately 200,000 students whose applications had been blocked.
Have you had any issues with your student loan provider? Let us know about your experience in the comments!
Plaintiffs are represented by Fletcher W. Moore and Justin A. Kuehn of Moore Kuehn PLLC and Lawrence P. Eagel of Bragar Eagel & Squire PC.
The Conduent Education Services Class Action Lawsuit is Chery c. Conduct Education Services LLC et al.Case No. 1:18-cv-00075, in the U.S. District Court for the Northern District of New York.
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