SupercitedVerified Matter
Sallie Mae Student Loan Collection Fee Class Settlement - Gallo
Estimated $76 million in debt relief and refunds for more than 40,000 California borrowers.
Four former California Culinary Academy students brought a class action against Sallie Mae alleging that it improperly imposed collection charges, generally 25% of unpaid balances, on defaulted private student loans before those costs were actually incurred. The plaintiffs asserted breach-of-contract, unfair competition, debt-collection, credit-reporting and related claims on behalf of California borrowers.
Result
- Outcome
- Settlement
- Value
- $76,000,000 estimated debt relief
- Short result
- Estimated $76 million in debt relief and refunds for more than 40,000 California borrowers.
- Remedy
- Debt Relief; Refunds
- Year
- 2013
- Published
- 2026-09-03
Supporting sources
- PDF — N.D. Cal. preliminary approval order · Court filing
- Law360: Sallie Mae Agrees To Cut $76M From Loans Over Default Fees · News / public announcement
- Top Class Actions — Sallie Mae Settlement Gets Final Approval · News / public announcement
- Violation Tracker — Sallie Mae Inc. $76 million settlement · News / public announcement
- PDF — Law360: Sallie Mae Agrees To Cut $76M From Loans Over Default Fees · Firm-confirmed information
- California Civil Code § 1671(b) · Cal. Civ. Code § 1671(b) · Statute / rule
- California Unfair Competition Law · Cal. Bus. & Prof. Code § 17200 · Statute / rule
- Rosenthal Fair Debt Collection Practices Act · Cal. Civ. Code § 1788 et seq. · Statute / rule
- California Consumer Credit Reporting Agencies Act · Cal. Civ. Code § 1785.1 et seq. · Statute / rule
- Federal Rule of Civil Procedure 23 · Fed. R. Civ. P. 23 · Statute / rule