Scholly Founder Christopher Gray Sues Sallie Mae Over Data Sales and Wrongful Termination
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The Story
Christopher Gray, founder of Shark Tank-backed scholarship app Scholly (5M users), is suing Sallie Mae in Delaware Superior Court and has filed an SEC whistleblower complaint. He alleges that after selling his app to Sallie Mae in 2023, he was wrongfully terminated for raising concerns about data privacy and that the company is selling students' personal information—including minors’ age, gender, race, and financial status—to third parties.
Background
Gray built Scholly to help students find scholarships. After growing up in Birmingham, Alabama, and securing $1.3 million in scholarships to Drexel University, he developed the app that matched users with financial aid based on their profiles. The app reached 5 million users, appeared on Shark Tank in 2015 (Lori Greiner and Daymond John invested), and became the number one download in both app stores.
In 2023, Sallie Mae, a student lending company deeply rooted in the American student debt crisis, acquired Scholly. The acquisition was part of Sallie Mae's strategy to expand beyond its core business into student financial wellness. Gray previously spoke positively about the acquisition, highlighting its potential benefits for students and historically Black colleges and universities.
However, according to a lawsuit filed by Gray, his relationship with Sallie Mae soured in July 2024 when the company laid off his co-founders and ultimately fired him. He alleges that this termination was due to his concerns about data privacy.
Key Allegations:
- Sallie Mae laid off Gray's co-founders.
- Gray was fired for raising data privacy concerns.
- The company is selling users' personal information, including minors', to third parties.
- This data includes age, gender, race, and financial status.
Quoted from the Lawsuit:
“The acquisition represented a distribution channel into a demographic that would eventually need student loans... though the company positioned the deal publicly as a commitment to helping students find free money before borrowing.” - Excerpt from the lawsuit.
Sallie Mae denies these allegations, but Gray's suit and SEC complaint highlight the growing concerns around data privacy in the student loan industry.