By Kyle Peveto, Staff Writer
Sallie Mae, a huge nationwide loan company that handles 20 percent of all student loans, has recently been sued by College Loan Corporation for “anti-competitive behaviors.”
In a lawsuit filed in a federal district court in Alexandria, Va., CLC accused Sallie Mae of violating the single-holder rule of the Higher Education Act, the Sherman Antitrust Act and the Virginia Antitrust Act.
When borrowers have several different loans from different lenders, the single-holder rule allows the borrower to consolidate all the loans under a single lender.
The lawsuit, however, will not affect student loans at ACU.
The Signature non-federal private loan, which can not be consolidated, is the only Sallie Mae loan available at ACU said Mike Fuller, Texas account executive for Sallie Mae.
CLC is suing Sallie Mae for at least $50 million dollars in compensation for profit that could have been made off over 4,000 loan applications the CLC had no access to.
“Sallie Mae intentionally misapplied the single-holder rule interfering with thousands of borrowers trying to exercise their right to consolidate loans with other lenders and in numerous cases, preventing those borrowers from obtaining a lower interest rate,” CLC said in a press release.
Sallie Mae contends that it interprets the single-holder rule the way other loan companies do. “They are going after us because we are the biggest,” Fuller said.