Financial Fraud

A settlement has been reached in a whistleblower class action lawsuit brought against 4 student lenders who are accused of inflating their interest rate subsidies from the U.S. Department of Education.

Under the settlement, Nebraska-based Nelnet paid the government $47 million, as well as $16.6 million to the whistleblower who filed suit. Also contributing were Southwest Student Services Corp., Texas-based Brazos Higher Education Authority and Brazos Higher Education Service Corp., Texas-based Panhandle Plains Higher Education Authority and Panhandle Plains Management and Servicing Corp. 

The originally filed whistleblower lawsuit alleges that the lenders misused and cheated a federal loan subsidy program by inflating the interest rates.

A settlement has been reached in a whistleblower class action lawsuit brought against Apollo Group Inc who is accused of defrauding the government of billions in financial aid.

Apollo Group Inc agreed to pay $78.5 million to the U.S. and a share of $11 million will go the whistleblowers.

Filed in 2003, the lawsuit alleges the company violated a federal ban on paying recruiters on the basis of the number of students enrolled. Apollo Group Inc paid $9.8 million in 2004 to the Department of Education to settle similar allegations.