Citibank was the first major lender to settle with the SSH students. Student Loan Xpress is likely to be next. That makes KeyBank most likely to be the last major lender to settle with the SSH students. KeyBank has not made any offer to Plaintiffs' counsel, though it has participated in discussions and agreed to participate in a mediation. Meanwhile, in January of 2009, KeyBank made individual offers to certain California SSH borrowers. In one such offer made to a Los Angeles, California client of mine, KeyBank offered to reduce my client's SSH KeyBank student loan balance by $8,763.36 from $66,763.16 to $58,000.00. This amounts to a 13% reduction for a client that received only his private pilot's license from SSH.
KeyBank wants an assignment of the student's proof of claim against SSH, a covenant not to sue, a confidentiality agreement, and a complete release. All it offers in return is a 13% discount. In my opinion, KeyBank's offer is not good enough. It is a bogus offer.
KeyBank mailed its offer directly to my client, with no copy to me. KeyBank did this despite the fact that I have previously advised KeyBank and its counsel of my representation of this client and of all the KeyBank clients that I represent. I urge all clients of mine who receive such a letter to forward said letter to me and to authorize me to reject KeyBank's offer. Together, we can do better.