A federal court judge approved a $24 million settlement in a class action suit brought by borrowers against Sallie Mae for alleged violations of the Telephone Consumer Protection Act.

The borrowers claimed in a District of Columbia federal court that the student loan company willfully and knowingly made automated calls and/or sent texts to an estimated 8 million class members over a five-year period, from October 2005 to September 2010.

The parties first agreed to a settlement of $19.5 million in October 2010, but the terms of the deal were changed after the court included additional class members. The additional $4.65 million will cover borrowers who had been 180 days or more delinquent on a loan payment at any time and those who had already paid off their loan balances.

Under the terms of the updated settlement, class members are entitled to different awards depending on the status of their loans.

Those who have never been 180 days or more delinquent on their loans are eligible for a cash award, estimated in the range of $20 to $40 but not to exceed $500, or a reduction of their principal balances. Borrowers who have been delinquent in the past, but whose balances are now current may only request a cash payment. Those who have been delinquent and are not current may only receive a loan reduction.

The class is also entitled to submit a “revocation request” instructing Sallie Mae – and its affiliates and subsidiaries – not to make automated calls or texts to a given phone number. Class members who do not submit the request form will be deemed to have provided prior, express consent pursuant to the TCPA.

To read the amended settlement agreement in Arthur v. Sallie Mae, click here.

Why it matters: In their motion in support of the settlement, plaintiffs’ counsel said the $24.15 million deal was the largest TCPA settlement of which they were aware. Class actions alleging violations of the statute – particularly those based on text messages sent without prior, express consent – continue to proliferate, and marketers should ensure compliance with the TCPA’s requirements or face a potentially costly lawsuit.