Sallie Mae, Justice Department in $60M settlement over student loans to service members

WASHINGTON - Student lender Sallie Mae has reached a $60 million settlement with the federal government to resolve allegations it charged military service members excessive interest rates on their student loans.

The settlement was announced Tuesday by Attorney General Eric Holder and Education Secretary Arne Duncan.

The deal settles a federal government lawsuit that accused the student loan giant of violating the rights of service members by imposing overly high rates and by improperly seeking default judgments against them.

"We are sending a clear message to all lenders and servicers who would deprive our service members of the basic benefits and protections to which they are entitled: this type of conduct is more than just inappropriate; it is inexcusable," Holder said at a news conference. "And it will not be tolerated."

Federal officials estimate that roughly 60,000 service members will be compensated as part of the settlement.