Nelnet in Settlement Talks on Oberg Case ... Brazos Settles

A federal judge ordered eight student loan companies - including Nelnet in Lincoln - to a settlement conference Wednesday, after two of their fellow defendants announced they have settled with former Nebraskan Jon Oberg, in his whistleblower lawsuit.
Oberg's lawsuit claims that collectively the companies defrauded the federal government out of at least $1 billion in their collection of interest-rate subsidies on student loans.

U.S. District Judge John F. Anderson issued his order Friday, at a hearing in the U.S. District Court for the Eastern District of Virginia, where defense attorneys had asked the judge to dismiss the case. They have charged Oberg with withholding information he knew was unfavorable to his claims.

In a strong message urging settlement, Anderson called on the remaining defendants to "have the wisdom to follows Brazos' lead," referring to the Brazos Higher Education Service Corp. and Brazos Higher Education Authority in Texas, whose undisclosed settlement terms are now before the U.S. Department of Justice. "And I don't want to suggest that you have to wait until next Wednesday," the judge said. A federal magistrate judge will run the conference.

In court, Oberg's attorney Bert Rein said his firm has had some settlement discussions with most of the remaining eight, including Nelnet and subsidiary Nelnet Education Loan Funding. Rein promised to contact the rest before next Wednesday.
Nelnet spokesman Ben Kiser said the company will comply with the court's direction and participate in Wednesday's conference. "Importantly, we believe that we have strong defenses against the claims, and are confident in our ability to achieve a successful outcome," Kiser said.

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