Firms involved in the class action say they and federal lawyers have agreed to the settlement, subject to court approval in February.
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The notice of settlement posted online says that every student who signed up for the class action will receive $60 due to the inconvenience associated with the loss of their personal information.
They will also receive payments to cover any actual losses directly related to the privacy breach, which could push the overall cost to the government even higher.
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The loss of personal information for some 583,000 Canada Student Loan recipients five years ago was one of the worst the federal government had ever suffered.
Personal details on the loan recipients were stored on a small, portable hard drive that went missing from Employment and Social Development Canada’s head office in Gatineau, Que.