The court of appeals affirmed a district court judgment. The court held that student loan borrowers’ claims against third-party servicer Sallie Mae were preempted by the Federal Family Education Loan Program of the Higher Education Act.
Ann Chae and others (Chae) took out Stafford, Supplemental, and Consolidated Loans from various lenders. Sallie Mae, Inc. (Sallie Mae) was the loan servicer for each of the loans. As a third-party servicer, Sallie Mae performed administrative and servicing functions related to the loans, such as issuing billing statements, collecting and processing payments, assessing and collecting late fees, and giving notices to borrowers required by Federal Family Education Loan Program (FFELP) regulations.
