The court has granted preliminary approval to a $10 million settlement resolving the consolidated litigation, and a notice program is underway to inform class members of their rights. Class members can review the settlement terms, notice documents, and claim information at www.nelnetsettlement.com.
Overview
Nelnet is a Nebraska-based student loan servicing company that provides loan servicing and web portal services for Edfinancial Services and the Oklahoma Student Loan Authority (OSLA). Between June and July 2022, an unauthorized third party exploited a vulnerability in Nelnet's systems and accessed the personal information of approximately 2.5 million student loan borrowers, including their names, addresses, email addresses, phone numbers, and Social Security numbers. On August 26, 2022, Edfinancial and OSLA began notifying affected borrowers that their information had been compromised.
Beginning in September 2022, SGT's clients and others filed a total of 23 putative class action complaints against Nelnet. The plaintiffs allege that the breach resulted from Nelnet's negligent and inadequate data security practices and that the company's delay in providing notice caused significant harm, as the stolen information was almost immediately used to commit identity theft, file fraudulent tax returns, and open fraudulent credit accounts. The consolidated complaint asserts claims for negligence, negligence per se, breach of implied contract, unjust enrichment, breach of confidence, intrusion upon seclusion, violation of the California Consumer Privacy Act, and violations of various state consumer protection statutes, seeking damages and injunctive relief. The settling entities deny the allegations and any wrongdoing.
On January 30, 2023, U.S. Magistrate Judge Cheryl R. Zwart consolidated the 23 actions and appointed SGT and Lowey Dannenberg as interim co-lead class counsel for the proposed class
Case Information
The case is Spearman et al. v. Nelnet Servicing, LLC, No. 22-cv- 03191-JMG-CRZ and is pending in the United States District Court for the District of Nebraska.