Lawsuit Against Sallie Mae Alleges Fraud
The Chronicle of Higher Education recently reported that a former Sallie Mae employee has filed a federal False Claims Act against the company alleging that Sallie Mae “had been using the practice of granting forbearances to systematically balloon student-loan debts.” From the article:
In the system of government-guaranteed student loans, the tactic was part of a strategy to grow student debts as large as possible, increasing Sallie Mae’s profits, before taxpayers and debtors were stuck with the final bill, said the former Sallie Mae employee, Michael Zahara.
For the legal geeks out there, I’ve attached a copy of the complaint. Zahara v. SLM Corporation