Lawsuit Charges That Student Lending Practices of Sallie Mae Are Racially Discriminatory

Two students — one Hispanic and one African American — have filed what they hope will be a class-action race discrimination lawsuit against Sallie Mae, the nation’s leading provider of student loans. The lawsuit claims that Sallie Mae discriminates against minority students by basing its interest rate for student loans on the default rates at particular colleges and universities. Educational institutions that serve large numbers of black and other minority students often have high default rates, making student loans costlier for all students who attend these institutions.