Loan Servicer Nelnet Sued Over Breach Said to Affect 2.5 Million

Nelnet Servicing LLC, a technology provider to student-loan servicing companies, failed to adequately protect 2.5 million borrowers whose sensitive personal information was exposed in a data breach, a proposed federal class lawsuit said.

The breach exposed social security numbers and other personal information of borrowers whose loans are serviced by the Oklahoma Student Loan Authority and Edfinancial Services LLC, plaintiffs Kennedy Freeman and Aaron Morris alleged in a lawsuit filed Sept. 12 in the U.S. District Court, District of Nebraska.

Nelnet didn’t comply with industry standards for protecting data, including the use of encryption, and didn’t inform all of the ...