There's a lot at stake in Nelnet's $10 million student loan settlement on Tuesday, May 5. It comes after the company, which is one of the nation's largest student loan borrower servicers, was involved in a data security incident.
Those impacted by the information breach, which court documents cite was approximately 2.5 million people, were able to file a claim earlier this spring. Now, a judge will decide whether the agreement is fair and how much those involved should receive.
Nelnet settlement fairness hearing results
The results should become available after the hearing, scheduled for Tuesday at 10 a.m., according to the settlement website . It is happening at the United States District Court for the District of Nebraska, Robert V. Denney Federal Building in Lincoln, Nebraska. However, court documents state that the length of the hearing is unknown. Updates on the status of the hearing will be shared on the settlement website.
Folks should note that the time and date of the hearing could be moved without notice. Class members can attend the hearing, but do not have to in order to remain eligible for future payment.
What is the Nelnet fairness hearing?
Court documents state that it will determine the "fairness, reasonableness, and adequacy" of the settlement, as well as requests for awards to pay for attorneys' fees, litigation expenses, and potential service awards for the involved plaintiffs.
Class action members who want to object to the settlement will also have a chance to speak at the hearing. Those who can't attend in person but still want to object will have the letters they submitted by the assigned deadline read aloud.
Is there a class action lawsuit against Nelnet?
Yes. Between early June and late July 2022, an unknown source accessed the student loan account registration information of certain borrowers, Nelnet said on its website . Details that were accessible included the borrowers' names, addresses, email addresses, phone numbers, and Social Security numbers. The company began notifying the millions of users who were impacted on July 21, 2022, and recognized that the cybersecurity team had found "a vulnerability" in its servicing system.
Complaints that Nelnet "failed to implement reasonable data security measures to protect consumers' personally identifiable information" started being filed against Nelnet on August 30, 2022, according to a notice filed in the U.S. District Court for the District of Nebraska. Plaintiffs also claimed that some "have experienced or have been exposed to fraud and identity theft and have otherwise been injured."
There are a total of 23 plaintiffs from 16 states, including Texas, Arizona, and Utah. This is a class action lawsuit, meaning the plaintiffs represent both themselves and other similarly situated persons.
Do I qualify for the Nelnet settlement?
The preliminary court approval order defines those who are eligible as anyone in the U.S. whose personal information was compromised in the data security incident. However, there are exceptions to eligibility, which are laid out on page eight of the long-form notice . Involved people needed to have file a claim by March 5, 2026.
How much is the Nelnet settlement?
The Settling Entities (Nelnet, OSLA, and Edfinancial) have agreed to pay a sum of $10 million for the benefit of the proposed settlement class, per the court's long-form notice . Some of those funds will go towards taxes, attorneys' fees, and other expenses awarded by the court.
"At this time, it is not known precisely how much each Authorized Claimant will receive from the Settlement Payment or when payments will be made," the settlement notice reads. "The amount of the Settlement Payment will depend on the types of relief selected and the number of claims that receive approval."
This article originally published at Nelnet's $10M settlement hearing is today. Here's what's at stake. .
