Man sues Sallie Mae over claims it refused to settle student loan dispute

A man is suing Sallie Mae, claiming the company refused to accept a settlement offer and has denied him access to the more than $30,000 he sent to repay his niece's student loan.

Gregory Kay filed suit July 8 in the Cook County Circuit Court against Sallie Mae, alleging unjust enrichment.

According to the complaint, Kay co-signed a $25,725 student loan for his niece on June 1, 2007. In early 2013, Kay claims he attempted to fully repay the loan by sending Sallie Mae a check for $32,800.59.

Along with the check, the suit states Kay sent a letter disputing Sallie Mae’s calculations as to the amount owed and made it clear he intended for his check to serve as full payment of the outstanding balance.

Sallie Mae not only refused to accept Kay’s settlement offer, but never returned his check or the funds he paid, the complaint alleges, noting that it instead deducted the amount from the balance it alleges is owed on the loan.

In addition to not having access to those funds, Kay asserts his credit has been and continues to be negatively impacted by Sallie Mae’s refusal to either return those funds or properly credit the loan account for the amount of Kay’s money Sallie Mae purportedly continues to hold.

Kay is seeking the return of his money, plus actual and compensatory damages, costs and a declaration the court that Sallie Mae's acceptance of his check satisfied the outstanding loan balance.

He is being represented by attorneys Ethan E. White and Michael I. Leonard of Leonard Law Offices in Chicago.

Cook County Circuit Court case number 2014L007144.

This is a report on a civil lawsuit filed at the Cook County Circuit Court. The details in this report come from an original complaint filed by a plaintiff. Please note that a complaint represents an accusation by a private individual, not the government. It is not an indication of guilt, and it represents only one side of the story.