Great Lakes’ records show that your account was subject to a “stand-alone” administrative forbearance. This Notice explains that the Court has allowed, or “certified,” a class-action lawsuit that might affect you. You have legal rights and options that you may exercise before the Court holds a trial. The trial is to decide whether the claims being made against Great Lakes, on your behalf, are correct. Judge James D. Peterson of the United States District Court for the Western District of Wisconsin is overseeing this class action. The lawsuit is known as Dawson v. Great Lakes Educational Loan Services, Inc., et al., Civil Action No. 15 CV 475.Top
This lawsuit is about whether Great Lakes, a servicer of federal student loans for the U.S. Dept. of Education and hundreds of other lenders wrongfully “capitalized” accrued interest on student-loan accounts in violation of federal regulations. A “capitalization” transaction occurs when a loan servicer converts a borrower’s interest obligations into principal obligations, causing interest charges on the loan to accrue more rapidly over time, and causing the total loan balance to grow more rapidly over time.Top
In a class action lawsuit, a person called a “Class Representative” (in this case Meredith D. Dawson) sues on behalf of other people who have similar claims. The people together are a “Class” or “Class Members.” Ms. Dawson and all the Class Members like her are called the Plaintiffs. The companies and individuals she sued are called the Defendants. In a class action, one court resolves the issues for everyone in the Class—except for those people who choose to exclude themselves from the Class.Top
The Court decided that this lawsuit can be a class action and move towards a trial because it meets the requirements of Federal Rule of Civil Procedure 23, which governs class actions in federal courts. Specifically, the Court found that:
- There are numerous borrowers who had their loans serviced by Great Lakes and had accrued interest “capitalized” after an administrative forbearance;
- There are legal questions and facts that are common to each borrower;
- Ms. Dawson’s claims are typical of the claims of the rest of the Class;
- Ms. Dawson and the lawyers representing the Class will fairly and adequately represent the Class’ interests;
- The common legal questions and facts are more important than questions that affect only individual borrowers; and
- This class action will be more efficient than having many individual lawsuits.Top
In the lawsuit, the Plaintiff has sued (1) Great Lakes Educational Loan Services, Inc.; (2) its former parent company, Great Lakes Higher Education Corporation; (3) Jill Leitl, Great Lakes’ current Chief Operating Officer and former Chief Servicing Officer; (4) David Lentz, Great Lakes’ former Chief Technology Officer; and (5) Michael Walker, Great Lakes’ former Chief Information Officer. (Collectively we refer to all of these Defendants as “Great Lakes.”)
The Plaintiff says that Great Lakes wrongfully capitalized interest obligations on Plaintiff’s and other Class members’ student loan accounts in connection with certain administrative-forbearance periods that Great Lakes applied to their loans. Plaintiff alleges that these improper interest capitalizations caused Class members’ loan balances to grow at unlawfully high rates over time. You can read Plaintiff’s complaint at the Case Documents page.
Great Lakes denies that it knowingly or negligently permitted Plaintiff’s or other Class members’ loan balances to become wrongfully increased as a result of the alleged interest capitalizations. Defendants maintain that, at all relevant times, they followed the U.S. Department of Education’s rules and regulations regarding interest capitalization for FFELP and Direct student loans. Great Lakes further contends that Plaintiff and other members of the Class did not suffer compensable financial injuries to the extent that they have not paid back more than they rightfully owed on their student loans. Great Lakes’ answer is also available at the Case Documents page.Top
The Court hasn’t decided whether Great Lakes or Plaintiff is correct. By certifying the Class and issuing this Notice, the Court is not saying who will win or lose the case. Plaintiff must prove her claims at a trial to be scheduled by the Court.Top
The Plaintiff is seeking to recover from Great Lakes three times the Class members’ actual financial damages, plus interest, the costs of the lawsuit, attorneys’ fees, and a Court order prohibiting Great Lakes from imposing or collecting unlawful interest charges against borrowers. The Complaint asserts claims for negligence, negligent misrepresentation, and violations of the Racketeer Influenced and Corrupt Organizations Act, 18 U.S.C. §§ 1961-64.Top
No money or benefits are available now because the Court has not yet decided whether Great Lakes did anything wrong, and the two sides have not settled the case. There is no guarantee that money or benefits ever will be obtained. If they are, you will be notified about how to ask for a share.Top
Judge Peterson decided that the potentially affected borrowers who are part of the Class in this case are as follows:
All persons, who, between January 1, 2006 and the present:
(i) were borrowers of a student loan issued under the Federal Family Education Loan Program (“FFEL” or “FFELP”), or a student loan issued under the Federal Direct Loan Program (“Direct” or “DLP”)
(ii) had their FFELP or Direct student loan(s) serviced by Great Lakes;
(iii) had Great Lakes place their FFELP or Direct student loan(s) in an administrative-forbearance status for a period of up to 60 days (that was not immediately preceded by another forbearance, deferment, or grace period), while Great Lakes processed their request for a deferment, forbearance, loan consolidation, or change in repayment plan; and
(iv) had any accrued interest obligations capitalized at the end of such an administrative forbearance
Within the above-defined Class, the Court has also certified three subgroups, or “subclasses,” of Class members.Top
The Court identified three “subclasses” of the Class as follows:
- Subclass 1—consists of Class members who were subjected to the capitalization of interest that accrued during the relevant administrative-forbearance period(s).
- Subclass 2—consists of Class members who were subjected to the capitalization of interest that accrued before the relevant administrative-forbearance period(s).
- Subclass 3—consists of Class members who were subjected to the capitalization of interest that resulted from two programming errors in Great Lakes’ automated student-loan servicing system.Top
If you are still not sure whether you are included, you can get free help on this website, or by calling or writing to the lawyers in this case, at the phone number or address listed in Question 22.Top
You don’t have to do anything now if you want to keep the possibility of getting money or benefits from this lawsuit. By doing nothing you are staying in the Class. If you stay in and the Plaintiffs obtain money or benefits, either as a result of the trial or a settlement, you will be notified about how to apply for a share (or how to ask to be excluded from any settlement). Keep in mind that if you do nothing now, regardless of whether the Plaintiffs win or lose the trial, you will not be able to sue, or continue to sue, Great Lakes—as part of any other lawsuit—about the same legal claims that are the subject of this lawsuit. You will also be legally bound by all of the Orders the Court issues and judgments the Court makes in this class action.Top
If you already have your own lawsuit against Great Lakes and want to continue with it, you need to ask to be excluded from the Class. If you exclude yourself from the Class, you might not obtain money or benefits from this lawsuit even if the Plaintiff obtains them as a result of the trial or any settlement (that may or may not be reached) between Great Lakes and the Plaintiffs. However, you may then be able to sue or continue to sue Great Lakes for your own claims concerning the “capitalization” of interest in connection with an administrative forbearance. If you exclude yourself, you will not be legally bound by the Court’s judgments in this class action.
If you start your own lawsuit against Great Lakes after you exclude yourself, you’ll have to hire and pay your own lawyer for that lawsuit, and you’ll have to prove your claims. If you do exclude yourself so you can start or continue your own lawsuit against Great Lakes, you should talk to your own lawyer soon, because your claims may be subject to a statute of limitations.
To ask to be excluded, you must send an “Exclusion Request” in the form of a letter sent by mail, stating that you want to be excluded from Dawson v. Great Lakes. Be sure to include your name and address, and sign the letter. You must mail your Exclusion Request postmarked by January 31, 2020, to: David J. Harris, Jr., Finkelstein & Krinsk LLP, 550 West C Street, Suite 1760, San Diego, California 92101. You may also get an Exclusion Request form on this website.Top
The Court decided that the law firm of Finkelstein & Krinsk LLP, of San Diego, California is qualified to represent you and all Class Members. The law firm is called “Class Counsel.” Its lawyers are experienced in handling class action cases against other defendants. More information about this law firm, their practices, and their lawyers’ experience is available at www.classactionlaw.com.Top
You do not need to hire your own lawyer because Class Counsel is working on your behalf. But, if you want your own lawyer, you will have to hire that lawyer yourself. For example, you can ask him or her to appear in Court for you if you want someone other than Class Counsel to speak for you.Top
If Class Counsel obtains money or benefits for the Class, they may ask the Court for fees and expenses. You won’t have to pay these fees and expenses. If the Court grants Class Counsels’ request, the fees and expenses would be either deducted from any money obtained for the Class or paid separately by Great Lakes.Top
As long as the case isn’t resolved by a settlement or otherwise, Class Counsel will have to prove the Plaintiffs’ claims at a trial. The trial has not yet been scheduled, but will take place in the United States District Court for the Western District of Wisconsin, 120 North Henry Street, Madison, Wisconsin. During the trial, a Jury will hear all of the evidence to help them reach a decision about whether the Plaintiff or Defendants are right about the claims in the lawsuit. There is no guarantee that the Plaintiff will win, or that she will get any money for the Class.Top
You do not need to attend the trial. Class Counsel will present the case for the Class, and Great Lakes will present the defenses. You or your own lawyer are welcome to come at your own expense.Top
If the Class obtains money or benefits as a result of the trial or a settlement, you will be notified about how to participate. We do not know how long this will take.Top
On this website, you can find the Court’s order, the complaint that the Plaintiff submitted, the Defendants’ answer, as well as an Exclusion Request form. You may also speak to one of the lawyers by calling (619) 238-1333, or by writing to: David J. Harris, Jr., Finkelstein & Krinsk LLP, 550 West C Street, Suite 1760, San Diego, California 92101.Top