Nelnet Class Action Lawsuit
UPDATE - July 14, 2021 - Student Loan Class Action Proceeds Against Nelnet Companies
UPDATE - March 31, 2021
Johansson et al. v. Nelnet et al. 4:20-cv-3069, U.S. District Court, Nebraska
Persons burdened with student loans will be permitted to proceed with their case against Nelnet, a student loan servicing company. An order issued by Chief Judge John M. Gerrard, U.S. District Court, Nebraska, ruled that the class action complaint of Andrew Johannsson and others contains plausible allegations outlining a case against Nelnet for the manner in which it deals with income-based repayment plans.
Our case does not involve all student loan services by Nelnet. It focuses on plans qualifying for adjustments in monthly payments based on income. Johansson and others contend that Nelnet systematically failed to process applications to modify payment terms and systematically failed to make requested adjustments for which borrowers qualified.
Mr. Johansson, who seeks to have the case certified as a class action for all borrowers in circumstances like his, was enrolled in an income-based repayment plan. He mailed annual recertifications and tax records to continue the payments but was involuntarily switched to a standard repayment plant. He resubmitted the application and was eventually approved but was placed in hardship forbearance, and penalized by the placement, because, he claims, Nelnet failed to properly process matters. He claims this activity by Nelnet increased his interest costs over time by more than $25,000, which Nelnet added to the balance of his loan.
Another plaintiff, Heather Porter, had a similar arrangement. She alleges she submitted renewal applications and proof of income and received confirmation of receipt at the same time. But, Ms. Porter contends her payments would be increased, and her request not granted. She resubmitted the material but her loan was also placed in an unfavorable status, accrued interest, and increased her debt though she claims she was qualified to be renewed in the income driven payment program. Other class representatives assert somewhat similar claims. One plaintiff’s claims differed from the others, and the court did not allow hers to stand.
The parties suing are from Illinois, Missouri, Texas, Colorado and Michigan. They joined together to bring the class action on behalf of all persons who qualify under the Class definition regardless of where they currently live.
The district court’s opinion analyzed the claims separately. It found that one claim depended on circumstances, as alleged, that did not permit it to proceed forward for technical reasons.
Nelnet claimed that some of its company should be dismissed and the plaintiffs should not be permitted to proceed against all of them. The Court disagreed.
The Court also sided with Domina Law’s clients stating that they may proceed to discovery and an effort to prove their contention that they have contracts with Nelnet, and that the contracts were breached by Nelnet’s conduct.
The Court’s thirty-page order permits our clients to proceed against Nelnet on claims of breach of contract, breach of their promissory notes, negligent representation of facts, and the right to an accounting under state law for amounts they paid and amounts that should be owed if their loans had been handled properly. In addition, under an Illinois statute, Mr. Johansson and his colleagues are permitted to proceed with a claim of deceptive practices prohibited by Illinois law.
Student debt in the United States has been documented as being so extensive that its total amount exceeds the amount of all home mortgage debt in the country. Some economists contend that the debt is so harsh that it changes the lives of debtors forever.
Domina Law Group, and Chicago lawyers Anthony Fiorentino, Daniel Edelman and Cassandra Miller represent the plaintiffs. The lawsuit represents the student loan debtors who seek recovery against Nelnet.
Thank you for your interest in our Class Action lawsuit against Nelnet which you can read more about below. It is important to understand that at this time we are still fighting for the Class to be certified. What this means is that unless and until a class of persons meeting specific requirements is certified by the court, there is nothing for you to join in regards to our lawsuit. When and if the Class is certified, and assuming your circumstances with Nelnet meet the approved Class definition, and assuming there is a settlement or verdict in favor of the Class after a trial there is nothing we can do for your specific circumstances at this time.
If you want to pursue an individual lawsuit against Nelnet we cannot assist you as we are focused on the nationwide class action we are handling.
We will update this page and our website periodically as progress is made in our Class Action lawsuit.
June 15, 2020
Five persons with student loans filed a comprehensive Class Action against Nelnet, Inc. and two of its subsidiaries in Federal District Ct. in Nebraska, today. The case is Johanson v. Nelnet, Case No. 4:20-CV-03069, U.S. Dist. Ct. Neb.
The Plaintiffs are student loan debtors from Illinois, Missouri, Texas, Colorado, and Michigan. All five used federal loans to finance their educations. All five elected to enroll in Income-Driven Repayment Plans ("IDR plans"). All five had to their applications or renewals delayed and all were damaged because interest was capitalized, the total loan volume increased, and the benefits of the IDR plan were diminished by delay.
All five plaintiff allege they submitted all required documents, even multiple times. And all five plaintiffs contend they suffered excuses, delays and lack of processing attention by Nelnet. Two of the five qualified for forgiveness programs because of the nature of their employment but are now required to work months or years longer to meet the qualification standards because of NelNet delays.
Domina Law Group pc llo , and Chicago lawyers Dan Edelman, Cassandra Miller and Anthony Fiorentino, joined forces to file the case.
The lawsuit identifies separate classes: a Breach of Contract class, a separate Negligent Misrepresentation class, and classes for the individual states where the Plaintiffs live.
Membership size in the class is not entirely known and will be discovered is the lawsuit progresses but is expected to reach potentially hundreds of thousands of persons. The Plaintiffs contend that the treatment by Nelnet at the core of their complaints constitutes a pattern of improper activity.
Persons with interests in the class action are encouraged to contact Domina Law Group pc llo. A questionnaire for qualification will be provided.
The Domina Law Group initially filed a class action lawsuit against Nelnet on June 8, 2019 on behalf of a woman in Oregon who claimed that her income-based repayment plan was cancelled by the student loan-servicing company prior to its stated deadline before she had the chance to renew it. This forced change in her plan added thousands of dollars to the loan.
After succeeding at procuring a court order authorizing the first lawsuit to proceed to discovery, changes in the circumstances of the class representatives required that the initial case be dismissed, new class representatives be identified, and a new case be file. This occurred as described above in the June 15 filing.
What do we claim:
- The lawsuit (PDF) alleges that Nelnet (1) Breached the servicing agreement between Nelnet and the Federal Government.
- The class representatives who are student borrowers are intended third party beneficiaries of the breached contract.
- The contract was breached and tortiously interfered with by Nelnet, causing harm to the students.
- Several state and federal laws were violated by Nelnet’s actions as it serviced student loans.
Our clients experienced several problems with Nelnet. One involves a refusal to accept monthly payments. Another involves refusal to process applications for forbearance, status, or involuntary placement of our clients in forbearance status by refusing to process their requests for new calculations of payments required under their qualifying materials for modified income driven repayment plans.
Several of our clients experienced excessive interest charges or loan servicing fees, and refusals to restructure their loans, resulting in a significantly increased debt over time.
It is well known, and the lawsuit alleges that in the
“Student loan debt is now the largest category of non-housing-related consumer debt in the United States with more than $1.34 trillion outstanding at the end of June 2017."
Attorney David Domina stated that thousands, and potentially millions of people have applied for the same type of deferment that Olsen applied for. Nelnet’s cancellation of this income-based repayment plan is a common and pervasive practice conducted by employees of this company, costing countless Americans thousands of dollars each.
Student loan debt is a massive burden millions of Americans carry, and it only becomes worse when loan-servicing companies alter or increase your plans without warning. Contact the Domina Law Group today if you were affected by these predatory practices.
We will consider information you submit to us. At a future date, if we win class certification and if your particular circumstances meet the class requirements, the information may be useful in contacting you.
For us to become your lawyers we must execute a written engagement agreement with you. We will not consider doing so until after we have successfully won class certification in the pending lawsuit against Nelnet.
The Domina Law Group is committed to providing experienced and knowledgeable legal expertise and representation to those in need. Through our efforts, our attorneys have secured more than $2 billion in verdicts and settlements since we first opened our doors in 1975. If you were affected by the actions of Nelnet, we encourage you to fill out the questionnaire as soon as possible so our attorneys can better understand your situation.
Completion of this questionnaire and submission of it to us does not constitute our agreement to provide legal services to you in any matter, investigate your case, file a case in court for you, investigate any periods of time, including statutes of limitation related to your case, or act as your lawyers in any way. This is your submission to us requesting that we consider one or more of the steps. It is not our commitment to you to do so. We will not be engaged as your lawyers unless and until a formal written engagement agreement has been signed by you and us. This information is CONFIDENTIAL and will be maintained by us and not published for any purpose unless and until you become engaged with us in writing in an Attorney/Client relationship.
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