NEBRASKA- On Friday student loan company Nelnet agreed to pay $55 million considering that a whistleblower alledged that Nelnet wrongly benifited from a student loan subsidy program by defrauding the government.
This lawsuit had been produced by previous U.S. Education Department specialist Jon Oberg and sought $3 billion in losses from Nelnet as well as some other companies. During a press release Nelnet mentioned that the lawsuit allegedly increased to $407 million in improper earnings within the subsidy, placing their possible liability, with three times the damages, in excess of $1.2 billion. Declining to comment on Friday, Oberg’s attorney, Bert Rein, mentioned that it was unknown if any additional companies had reached similar settlements who were named as defendants in the lawsuit..
A spokeswoman for the accused Sallie Mae declined to provide feedback. U.S. District Judge John F. Anderson, who is handling the case pertaining to the Eastern District of Virginia, submitted the order Friday eliminating a trial set to start Tuesday in addition to staying any additional motions in the case. Anderson’s order states there won’t be any additional pleadings in the case unless of course they are based on
“the resolution of claims by the parties.”
He arranged a status conference for Oct. 1
“in the event there has not been a resolution of the claims with all the current defendants.”
These parties were in settlement conference required via the court ever since Wednesday. Oberg submitted a suit towards Nelnet, Sallie Mae plus several additional loan companies within provision with the Federal Civil False Claims Act enabling private citizens to file a lawsuit within the name of the U.S. government, charging fraud. Besides the $3 billion in losses, this lawsuit also sought civil fines of $11,000 for every infringement of civil law.
Being employed as a examiner with the federal Department of Education, Oberg, a University of Nebraska-Lincoln scholar as well as former assistant to Nebraska Sen. Jim Exon, worked as a examiner with the federal Department of Education when he revealed the flaw which permitted student loan companies to take advantage of a govt subsidy plan to a 9.5 % rate on their loans.