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Ottawa to pay $17.5M to settle student loan privacy breach lawsuit

The federal government has agreed to settle a class action lawsuit over a massive student loan privacy breach five years ago. AP Photo/The Orange County Register, Mark Felix, File

The federal government will pay at least $17.5 million to settle a class action lawsuit filed after a major privacy breach involving about 583,000 student loan recipients.

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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.

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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.

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.

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