On April 29 2026, Christopher Gray, the founder of the scholarship‑matching platform Scholly, filed a whistleblower and data‑privacy lawsuit against SLM Corporation and its subsidiary SLM Education Services, LLC in the Delaware Superior Court. The complaint accuses SLM of creating a two‑entity structure that allows the company to sell the personal data of millions of students, including minors, while evading federal privacy regulations such as the Gramm‑Leach‑Bliley Act (GLBA).
The lawsuit points to the website sallie.com, operated by SLM Education Services, which explicitly states it "sells" and "shares" personal information for advertising and marketing purposes. This claim is presented as a deliberate circumvention of GLBA restrictions that apply to financial institutions handling student data.
The complaint also references SLM’s acquisition of Scholly in 2023 and the launch of Backpack Media on March 4 2026. Backpack Media was introduced as a non‑bank subsidiary intended to monetize student data under a new media platform, a strategy that SLM has positioned as part of its broader move toward becoming an education‑solutions company. The fact‑check report confirms the March 4 launch date, correcting the earlier March 2024 claim.
This filing is the first public legal challenge to SLM’s data‑privacy practices and could trigger regulatory scrutiny from the SEC and FTC, potentially leading to investigations, penalties, and required changes to data handling practices. The allegations also carry significant reputational risk, as the sale of student data—including that of minors—could erode trust among students, parents, and educational institutions.
Analysts had recently raised SLM’s price target to $29 from $28 after Q1 earnings, reflecting confidence in the company’s financial performance. No market reaction to the lawsuit has been reported, and SLM has not issued a statement or management commentary on the allegations. The absence of a corporate response suggests the company is still assessing the implications of the lawsuit.
The lawsuit underscores the tension between SLM’s expansion into education technology and its compliance with federal privacy laws. If the court determines that the two‑entity structure is unlawful, SLM may need to restructure its data practices, potentially incurring significant costs and operational disruptions that could affect its media and lending businesses.
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