Sallie Mae, the largest servicer of federal and private studentloans, was ordered to pay $96.6 million in restitution andpenalties for violating the legal rights of U.S. service members,according to the Justice Department.

The payout announced May 13 settles claims that Sallie Maeviolated the Servicemembers Civil Relief Act by overchargingenlisted borrowers. The DOJ and FDIC each reached settlements withSallie Mae.

The violations were first revealed in a 2012 CFPB report that found service members were not provided clearand accurate information about their loan repayment options bystudent loan servicers.

Holly Petraeus, assistant director at the CFPB's Office ofServicemember Affairs, said, “The men and women serving thiscountry should receive quality customer service and the legalprotections afforded to them. Instead, Sallie Mae gave servicemembers the runaround and denied them the interest-rate reductionrequired by law. This behavior is unacceptable. And it'sparticularly troubling from a company that benefits so generouslyfrom federal contracts.”

Petraeus also said the settlements should serve as warning toall institutions that provide or service loans to the military.