Student Lenders Face Lawsuit About Overpayments

RICHMOND, Va. (AP) — A former U.S. Department of Education researcher has filed a lawsuit against 10 student loan companies to recover roughly $1 billion the companies received improperly.

The lawsuit Jon Oberg filed in eastern Virginia's federal court was unsealed on Monday. Oberg filed the lawsuit on behalf of the U.S. government as a whistle-blower because he helped uncover the overpayments.

The lawsuit asks for the companies to return overpayments they received improperly.

A government audit found several student lenders had received an artificially high rate of return through a program that was supposed to be phased out in 1993.

The defendants include two of the biggest student lenders: Lincoln, Neb.-based Nelnet Inc. and Reston, Va.-based Sallie Mae.