Student Loan Companies Agree To Pay $57.75 Million To Settle False Claims Act Lawsuit

On November 17, 2010, the U.S. Department of Justice announced that four student loan companies (Nelnet, Inc., Southwest Student Services Corp., Brazos  Higher Education Authority, and Panhandle Plains Higher Education Authority) agreed to pay the Government a combined total of $57.75 million to resolve allegations in a lawsuit brought under the False Claims Act that the companies submitted false claims to the Department of Education by using billing systems that allowed them to receive improperly inflated student loan interest rate subsidies.  The qui tam lawsuit was brought on behalf of the Government by Dr. Jonathan Oberg, a former Department of Education employee.  As a reward for disclosing the fraud to the Government, Dr. Oberg will receive a $16.65 million share of the settlement.

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