Nurse Settles Student Loan Dispute With Sallie Mae
Hannah Bates reached a court-approved settlement with Sallie Mae after the lender erroneously notified her of a zero balance before garnishing her wages.
A judge approved a settlement in late September between Hannah Bates, a 31-year-old nurse, and private student-loan lender Sallie Mae. Under the terms of the agreement, Bates will begin making monthly payments of $600 toward her outstanding balance on November 1.
The legal conflict began in October 2024 when Sallie Mae erroneously notified Bates that she had paid off her $55,000 balance. In reality, Bates was falling behind on monthly payments of $1,500. After Bates failed to negotiate a manageable payment plan and received conflicting information on how to avoid default, the lender sued her. The resulting court order led to the garnishment of $884 from two of her paychecks.
This case occurs amid rising borrower complaints to the Consumer Financial Protection Bureau regarding private student loans, which lack the oversight applied to federal loans. Advocacy groups have noted an increase in lawsuits filed by private lenders against borrowers across the United States.
