Sallie Mae Again Dodges Suit In Culinary School Fraud Row

By Kurt Orzeck (June 21, 2016, 11:12 PM EDT) -- The Ninth Circuit on Tuesday issued a split decision refusing to revive a putative fraud class action alleging that Sallie Mae knew low-income students enrolled in a now-shuttering culinary school wouldn't make enough as chefs to repay the lender's high-interest loans.

Affirming a lower court decision, the panel's majority determined that the former students of California Culinary Academy who filed the suit didn't plead enough facts showing Sallie Mae Inc. and SLM Corp. knowingly issued loans to students who they knew would default.

The plaintiffs are graduates of the CCA who alleged SLM and Sallie Mae acted as the "preferred lender"...

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