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Nelnet Class Action Lawsuit

The Domina Law Group initially filed a class action lawsuit against Nelnet on June 8 on behalf of a woman in Oregon who claimed that her income-based repayment plan was cancelled by the student loan-servicing company prior to its stated deadline before she had the chance to renew it. This forced change in her plan added thousands of dollars to the loan.

The lawsuit (PDF) states that Nelnet:

  1. Breached their servicing contract with the federal government, of which Plaintiff was an intended third party beneficiary.
  2. Breached and/or tortuously interfered with written agreements between the federal government and student loan borrowers, namely Plaintiff.
  3. Violated various state and federal laws in connection with the servicing of Plaintiffs’ federal student loans.

Our client, Jessica Olsen, applied for and received an income-based repayment plan in 2014. This plan did not require her to make monthly payments, a requirement she would have difficulty fulfilling due to her low income. Olsen was notified that she would have to submit a renewal application with Nelnet in order to continue this plan within 10 days of January 31, 2015.

Before those 10 days elapsed, Nelnet switched Olsen to a standard repayment plan and capitalized her accrued interest. This change would require her to pay $968.10 per month for the next 10 years, and added almost $8,700 to her loan. When she contacted Nelnet customer service to inquire about her application’s status, a Nelnet employee advised her to place her account into forbearance, which would allow her to temporarily hold off on making any new payments for the next three months, but would add the accrued interest to the loan capital.

Olsen’s lawsuit states that this advisement to move her account to forbearance accommodated a delay in the processing of her renewal application, and violated the Oregon Unlawful Trade Practices Act, the Nebraska Uniform Deceptive Trade Practices Act, and the Nebraska Consumer Protection Act through increasing revenues by moving accounts of borrowers into forbearance or deferment. The lawsuit states that,

"Student loan debt is now the largest category of non-housing-related consumer debt in the United States with more than $1.34 trillion outstanding at the end of June 2017.”

Attorney David Domina stated that thousands, and potentially millions of people have applied for the same type of deferment that Olsen applied for. Nelnet’s cancellation of this income-based repayment plan is a common and pervasive practice conducted by employees of this company, costing countless Americans thousands of dollars each.

Student loan debt is a massive burden millions of Americans carry, and it only becomes worse when loan-servicing companies alter or increase your plans without warning. Contact the Domina Law Group today if you were affected by these predatory practices.

If you were affected by increasing loan amounts, were charged excessive fees, if your payment plan was cancelled or altered without warning, etc. fill out our questionnaire today to provide us with information about your situation. We will evaluate your potential claims and let you know if a recovery may be possible for you!


The Domina Law Group is committed to providing experienced and knowledgeable legal expertise and representation to those in need. Through our efforts, our attorneys have secured more than $2 billion in verdicts and settlements since we first opened our doors in 1975. If you were affected by the actions of Nelnet, we encourage you to fill out the questionnaire as soon as possible so our attorneys can better understand your situation.

Completion of this questionnaire and submission of it to us does not constitute our agreement to provide legal services to you in any matter, investigate your case, file a case in court for you, investigate any periods of time, including statutes of limitation related to your case, or act as your lawyers in any way. This is your submission to us requesting that we consider one or more of the steps. It is not our commitment to you to do so. We will not be engaged as your lawyers unless and until a formal written engagement agreement has been signed by you and us. This information is CONFIDENTIAL and will be maintained by us and not published for any purpose unless and until you become engaged with us in writing in an Attorney/Client relationship.

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