Student loan giant Sallie Mae and Navient, a former loan servicing unit of Sallie Mae, agreed Tuesday to settlements with two federal agencies for charging members of the military high interest rates and fees. About 60,000 servicemembers will receive compensation under the settlement.
The U.S. Department of Justice charged the company with violating the Servicemembers Civil Relief Act. The agency said since 2005 the defendants failed to provide servicemembers the 6 percent interest rate cap they were entitled to. The department also alleges that defendants violated the SCRA by obtaining default judgments against servicemembers.
The proposed settlement requires Sallie Mae to pay $60 million to servicemembers for the alleged SCRA violations.