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Minnesota National Guard
Class action suit against student loan servicers settled

by Jessica Mador, Minnesota Public Radio
September 6, 2012


ST PAUL, Minn — A class action suit brought by a member of Minnesota National Guard against student loan servicers has been settled for $232 million

The Minneapolis law firm Crowder Teske announced the settlement in an email Wednesday The lawsuit alleges Citibank and the Student Loan Corporation failed to honor a law intended to protect military service members on active duty

The settlement affects more than 6,300 military service members across the country According to court documents, the suit charges the lenders violated the Service members Civil Relief Act

Under the act, active duty troops are entitled to a 6 percent interest rate cap on their loans The suit was brought by Maj Lyndsey Olson, who deployed to Iraq with the Minnesota Army National Guard for a year beginning in 2008 She alleges the banks violated the interest rate cap during her military service

Under the terms of the settlement, members of the military will receive cash payments of up to around $650 dollars per loan Many of them have more than one loan

The court did not rule on the merits of Olson's allegations against Citibank and the Student Loan Corporation

The act was signed into law by President George W Bush in 2003 President Barack Obama in 2010 signed into law a provision allowing Service members to bring claims for violation of the Service members Civil Relief Act This settlement could be among the first to be brought over loan charges
Article source
http://minnesota.publicradio.org/display/web/2012/09/06/judiciary/class-action-suit-against-student-loan-servicers-settled/



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