Sallie Mae to pay servicemembers $60 million

May 13, 2014
Ernesto McConnell
Reporter
Headlines

In order to settle allegations that their company knowingly charged members of the U.S. armed forces excessive interest rates on student loans, Sallie Mae will pay $60 million in penalties. Servicemembers are protected from excessive interest rates by the Servicemembers Civil Relief Act, which caps interest rates at 6%. In addition to the high interest rates, Sallie Mae is also being accused of using improperly obtained default judgments against members of the U.S. military. The Department of Justice reports that some 60,000 servicemembers who have taken student loans from Sallie Mae have been affected. “Federal law protects our servicemembers from having to repay loans under terms that are unaffordable or unfair,” said U.S. Attorney General Eric Holder. “That is the least we owe our brave servicemembers who make such great sacrifices for us.”