Sallie Mae Accused of Overcharging Military Personnel on student Loans
The answer is “yes”
Servicemembers Civil Relief Act caps interest on loans to military personnel at 6 percent, along with providing protections against default judgments and garnishments, and a person briefed on the matter said compliance with the 6 percent limit would be a key part of the F.D.I.C. action. Under the law, if a person borrows money at a higher rate and then enters the military and requests a lower rate, the lender must reduce the rate to 6 percent, and forgive any interest above that level.
Federal regulators plan to accuse Sallie Mae, the giant student lending corporation, of charging military personnel excessive interest on student loans, and the government is looking into similar allegations against other lenders.
Sallie Mae revealed the pending action against it this week in its quarterly earnings report, stating that the Federal Deposit Insurance Corporation warned in July that it planned to take “new formal enforcement action” against the lender.
“At what time did Sallie Mae think it was a wise business decision to charge our military personnel a higher interest rate than allowed by law? I cannot believe this stupidity starts at the bottom. It has to come from the top management, if not the very top.”
Diane is a well respected Arizona bankruptcy and foreclosure attorney. As a retired law professor, she believes in offering everyone, not just her clients, advice about bankruptcy and Arizona foreclosure laws. Diane is also a mentor to hundreds of Arizona attorneys.
*Important Note from Diane: Everything on this web site is offered for educational purposes only and not intended to provide legal advice, nor create an attorney client relationship between you, me, or the author of any article. Information in this web site should not be used as a substitute for competent legal advice from an attorney familiar with your personal circumstances and licensed to practice law in your state. Make sure to check out their reviews.*
IMPORTANT PROGRESS FOR STUDENT LOAN BORROWERS WHO HAVE BEEN IN REPAYMENT TWO DECADES OR MORE Posting from the National Consumer Law Center Important Progress for Student Loan Borrowers Reposting from NCLC, July [...]
DOD to Help Military and Their Families SIX New Measures to Enhance Well-Being Release from US Department of Defense, March 22, 2023 Secretary of Defense Lloyd J. Austin III unveiled a comprehensive plan [...]
New Consumer Law Rights Taking Effect in 2023. This NCLC article lists federal and state consumer law rights scheduled to go into effect or expire, during the period from November 17, 2022, through December 31, 2023. Other consumer law changes will be enacted later in 2023 and will go into effect in 2023; this article lists changes whose effective dates have already been scheduled.
We are a debt relief agency; we help individuals and small businesses through the bankruptcy process. Attorney Advertising. This website is designed for general information only. Any information you obtain from this website should not be construed as legal advice, nor as grounds for forming an attorney-client relationship. You should consult an attorney for information on obtaining formal legal advice.