T.H.E. Bonus Litigation--Proposed Class Action Settlement

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TMP-SMX

TMP-SMX

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So I got an email today about a class action lawsuit against the lender THE from them. They are being sued because they did not follow through on their benefits they promised. I have a feeling that this lawsuit will do a whole lot of nothing since they have the right to stop the benefits as they please. If THE is found to be at fault the settlement is reinstatement or reimbursement of the benefits.

Here is the website about the lawsuit.
 
TMP-SMX said:
So I got an email today about a class action lawsuit against the lender THE from them. They are being sued because they did not follow through on their benefits they promised. I have a feeling that this lawsuit will do a whole lot of nothing since they have the right to stop the benefits as they please. If THE is found to be at fault the settlement is reinstatement or reimbursement of the benefits.
Click to expand...

I assume you got the same E-mail that I did. Actually what was sent is a notice of a proposed settlement. Based on my very quick read It basically sets up a fund to pay for the lost benefits over the next several years and gives the lawyers a very nice payday. Typical class action: plaintiff's attorneys make a sweatheart deal with the defense in order to get a quick settlement and max out attorneys fees.

Ed
 
edmadison said:
I assume you got the same E-mail that I did. Actually what was sent is a notice of a proposed settlement. Based on my very quick read It basically sets up a fund to pay for the lost benefits over the next several years and gives the lawyers a very nice payday. Typical class action: plaintiff's attorneys make a sweatheart deal with the defense in order to get a quick settlement and max out attorneys fees.

Ed
Click to expand...

So how do I opt in for the class action-something is better than nothing. Do I have to get in coNtact with anyone or do I not reply? Are the above posters planning on joining in on the lawsuit? I wouldn't mind getting a couple of bucks.
 
vir0n said:
So how do I opt in for the class action-something is better than nothing. Do I have to get in coNtact with anyone or do I not reply? Are the above posters planning on joining in on the lawsuit? I wouldn't mind getting a couple of bucks.
Click to expand...

Sounds like it's an opt-out system, so you're automatically included if you don't do anything. I did not get this email, though, and have loans through T.H.E.. From looking at the settlement, it sounds like T.H.E. just promised to make a good faith effort to give the bonus when they have the funds to do so, which they might never have.
 
TMP-SMX said:
The email is attached. I agree it sounds like a nice payday for the lawyers. 2 mill if they lose plus a bonus 2.5 mill if they win.
Click to expand...

There's no winning or losing involved. This is the settlement. The lawyers essentially will get 4.5 million if THE doesn't go bankrupt and default on the agreement. If it does, they will have to be content with just 2 mil. Don't even get me started on attorney's fees in class action cases.

Ed
 
I had T.H.E loans also...but I thought the loan got sold to someone else...they DID stop paying the bonus they promised (for paying on time each month, etc.). I never got the email, though. Would we still be eligible to participate in the settlement if your loans got sold to another company?
 
dragonfly99 said:
I had T.H.E loans also...but I thought the loan got sold to someone else...they DID stop paying the bonus they promised (for paying on time each month, etc.). I never got the email, though. Would we still be eligible to participate in the settlement if your loans got sold to another company?
Click to expand...

"The Settlement will provide to Settlement Class Members reinstatement of the Bonus during such time as a loan is in repayment and is owned by or on behalf of Northstar and the loan account is 59 days or less delinquent, pro rata payments with a minimum guarantee for five years, and/or a distribution from a Settlement Bonus Trust Account in the event that a Settlement Class Member’s loan was sold, consolidated, or paid off before the Settlement Agreement was approved all in accordance with the Settlement Agreement."

It looks like you will get some money if your loan was sold, according to this paragraph.
 
Finally, some justice. Much less than ideal, but a little bit is better than nothing.

All of these lenders, financial aid offices and counselors, US Department of Education ought to be sued for telling students these repayment incentives were guaranteed and would be honored in any circumstance. It was only after the student lending business imploded did most of us get informed these repayment incentives were as flimsy as the paper they were advertised on.
 
So does anyone understand exactly how this works? The vast majority of my loans were consolidated by THE when I graduated in 2004. I have about 140k with them that were in deferment/forebearance while I was in residency. I made some interest payments during that time but didn't start making actual regular payments until about 6 months ago.

Sooo. . .my question is, should I be getting back the equivalent of the 1% interest that was accrued since 2004? Honestly I don't remember exactly what the deal with the bonus was to begin with. It was supposed to be 1% discount if you paid on time once you go into repayment, as I recall. But, from looking at my account and the definitions they use to describe the loan status, deferment is described as "A period of time after repayment begins when borrowers of federal guaranteed student loans, upon meeting certain conditions, are not required to make payments of loan principal." So technically I've been in repayment since I graduated and therefore I'm hoping I should be eligible for a 1% discount for the past 5 years. Wishful thinking?
 
Apparently the settlement was approved on 4/8/10. I'm not entirely sure though what this means and if/when/how I would get any part of this Settlement.
 
What was the settlement outcome? Are they going to honor the "bonus" as originally promised?
 
I'm not sure exactly how its going to work. I have the bulk of my loans through THE and haven't heard anything since getting that initial letter about the suit. The loans are now "serviced" by Great Lakes, not sure if that has any bearing or not. My listed interest rate has not changed.
 
So I was just looking at my online statement today and for this month I now have a credit for $65 listed as "THE bonus." Not sure how they came to this number, I have about 145K in loans that should qualify. Regardless, if it is the same every month I'll happily take the ~$800 a year.
 
UserNameNeeded said:
How much less than the original promise is that $65?
Click to expand...

So the best I can come up with to explain the numbers is the following. I thought that the original deal was a 1% discount on the loans, but I think there were actually times when they offered 0.5% and 0.75% off. And I think it may be limited to the unsubsidized portions of the loans. I have ~104k in unsubsidized/private loans, and if the discount is .75%, that ends up being $780, which is exactly $65 a month. So its either spot on or I got gypped by 0.25%.
 
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Hmm not sure about the $80 thing. The main part of the settlement is to reinstitute the bonus as I understand it. It should be feasible, at least for those whose loans are still held by THE since they don't have to actually "pay" you anything, it just ends up being a reduction in how much you pay them.

I just looked at my account again though and I have a new credit for about $10. . .it was given in June though and the original credit I mentioned above was also in June so I have no idea whats up with that. Hopefully the new $10 isn't my entire bonus for July.
 
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odieoh said:
Hmm not sure about the $80 thing. The main part of the settlement is to reinstitute the bonus as I understand it. It should be feasible, at least for those whose loans are still held by THE since they don't have to actually "pay" you anything, it just ends up being a reduction in how much you pay them.

I just looked at my account again though and I have a new credit for about $10. . .it was given in June though and the original credit I mentioned above was also in June so I have no idea whats up with that. Hopefully the new $10 isn't my entire bonus for July.
Click to expand...

Just wanted to chime in here. On 6/8/10, I received a THE bonus payment of $85.25. Again on 6/28/10, I received $4.09. My balance at this time is around 65K. I have not received anything at all since then.

From what I can tell, this is not a one time deal.

The terms of the settlement state "Distributions from the Settlement Bonus Trust Account to Settlement Class Members shall be made no less frequently than 4 times/year."

http://www.northstarloansettlement.com/docs/SettlementAgreement.pdf

Northstar will be required to make these transfers over the life of each Settlement Class Members' loans at its own expense. p 22-23.

Now I don't trust Northstar as far as I can throw them; I think they are a bunch of idiots. So they may find ways out of it such as ch 13 reorganization or something. There were some clauses in the settlement that dealt with that.

But otherwise, we're supposed to get quarterly re-instatements of the bonus. I say quarterly, but them splitting up the 1st payment, they probably successfully found some loophole where that technically counts as 2 of the 4 payments.
 
Here is my update: After receiving that initial THE Bonus payment of ~$80 in June, I received $4 in July and this month I got a lump sum of $2. Thank goodness for that settlement!!!
 
lou1982 said:
here is my update: After receiving that initial the bonus payment of ~$80 in june, i received $4 in july and this month i got a lump sum of $2. Thank goodness for that settlement!!!
Click to expand...

lol!
 
Hmmm...if I'm really getting my THE bonus back, then I'll never say anything nasty about those lawyers and their class action lawsuits ever again...LOL.
 
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