Pomerantz Law Firm Files Class Action Against SLM Corporation Amid Rising Delinquency Rates

Class Action Lawsuit Against SLM Corporation

Pomerantz LLP, a well-regarded law firm specializing in corporate and securities litigation, recently announced the filing of a class action lawsuit against SLM Corporation, known widely as Sallie Mae, or simply SLM. This lawsuit was prompted by alleged violations of federal securities laws committed by the Company and some of its top executives during a critical period in mid-2025. The class action, which is officially filed under the case number 25-cv-18834 in the United States District Court for the District of New Jersey, represents all investors who purchased SLM securities from July 25 to August 14, 2025. According to the information provided, these investors are seeking to recover losses due to misleading statements made by the company regarding its financial health.

Background on SLM Corporation

SLM Corporation primarily focuses on originating and servicing private education loans (PELs) aimed at students and their families. The company has positioned itself as a provider of “high-quality” loans and has claimed to implement effective loss mitigation strategies to enhance the collectability of these loans. However, the recent allegations indicate that there may be discrepancies in the company's public statements and the actual situation on the ground.

Allegations Against SLM

The crux of the class action lawsuit revolves around the assertion that the defendants, including certain high-ranking officials of SLM, made materially false and misleading statements about the company's operational outlook. Investors were reportedly assured that the rising delinquency rates observed in SLM's loans were merely the result of “normal seasonal trends.” However, a subsequent report from investment bank TD Cowen contradicted those claims, highlighting a significant uptick in early-stage delinquencies — a concerning indicator of financial instability.

Attorney Danielle Peyton, who is leading the charge on behalf of the investors, has indicated that the case is built on the premise that SLM significantly overstated the effectiveness of its loan mitigation programs. The lawsuit suggests that the company’s defenses were not only misleading but painted a much rosier picture than warranted by reality.

The Impact of Rising Delinquency Rates

SLM has been known to charge off delinquent loans after they reach 120 days past due. The rise in delinquency rates is particularly alarming, as the cost to service delinquent borrowers vastly exceeds that of current or in-school borrowers. Borrowers classified as delinquent tend to weigh heavily on the company's overall profitability — an aspect that investors closely monitor. During a prior investor call, Peter M. Graham, SLM's Executive Vice President and Chief Financial Officer, offered assurances regarding the “normalcy” of the company’s delinquency trends. These reassurances provided a false sense of security to investors, making the subsequent reports highlighting the escalating delinquencies all the more shocking.

What This Means for Investors

For investors who participated in the class period, the implications are significant. Individuals who acquired SLM shares or other securities during the time in question are advised to act swiftly. They have a deadline until February 17, 2026, to apply for the lead plaintiff role in the class action. Copies of the complaint and further insights can be accessed through Pomerantz LLP's official website.

As the case unfolds, it brings to light critical questions regarding transparency in corporate financial reporting and accountability for potentially misleading claims. The outcome of the class action could not only impact SLM but also serve as a cautionary tale for investors in similar fields. Pomerantz LLP has a strong track record of advocating for justice in securities fraud cases, and their efforts in this instance may shape the future of corporate governance.

Conclusion

As the situation develops, all eyes will be on SLM Corporation as they contend with the implications of this lawsuit. This case serves as a reminder of the paramount importance of transparency and honesty in financial disclosures. For investors, remaining informed and proactive is essential during these turbulent times in the financial sector.