Legal Battle: Scholly Founder Takes on Sallie Mae in Lawsuit

In 2023, Chris Gray, the founder of the Shark Tank-backed scholarship search startup Scholly, sold his company to Sallie Mae, only to end up suing the student loan giant for wrongful termination and data privacy concerns. Gray accused Sallie Mae of selling the data collected by his app without proper user notification, including personal information of minors.

Scholly was co-founded by Gray with the goal of helping students easily find untapped college scholarships. After securing investments from Daymond John and Lori Greiner post a Shark Tank appearance, Gray successfully sold Scholly to Sallie Mae, becoming one of the few Black venture-backed fintech founders to exit his company.

Initially enthused about the acquisition, Gray took on a vice president role at Sallie Mae and looked forward to scaling Scholly and making it free for all users. However, things took a turn when Gray alleged that Sallie Mae laid off his employees, reneged on promises, and ultimately terminated him when he raised concerns about data privacy issues.

Gray’s legal battle against Sallie Mae includes a lawsuit filed in Delaware Superior Court and a whistleblower complaint submitted to the Securities and Exchange Commission. He contends that Sallie Mae is selling Scholly user data through a subsidiary, circumventing regulations meant to protect user privacy.

Sallie Mae refuted Gray’s claims, stating they were baseless, and avoided addressing questions regarding their data privacy practices. Despite the denial, Gray stands by his allegations, emphasizing his commitment to protecting the students who relied on Scholly.

Gray’s journey from growing up in low-income Alabama to creating Scholly was driven by his own struggles to access higher education. Witnessing the challenges firsthand, he aimed to simplify the scholarship search process, leading to the inception of Scholly.

The platform’s success on Shark Tank catapulted Scholly’s user base to 5 million, generating over $30 million in revenue. However, Gray’s optimism post-acquisition turned sour when Sallie Mae allegedly began exploiting Scholly user data for financial gain.

Gray’s legal battle with Sallie Mae intensified as he accused the company of laying off the Scholly founding team, including himself, and leveraging user data through a separate entity named Sallie.com. This alleged data selling operation raised concerns about student privacy and ethical business practices.

Despite facing pushback from Sallie Mae, Gray remains steadfast in his commitment to holding the company accountable for its actions. His fight for data privacy and ethical business conduct reflects his unwavering dedication to the students he aimed to assist through Scholly.