A couple of weeks ago the mailman dropped a thin envelope with a St. Paul, Minnesota return address through the slot in my front door. It contained a check from my wife’s student lender, Northstar T.H.E. Loans, in the amount of $27.30. In that my extensive personal experience with student loan companies has very consistently been one in which the checks flow in the opposite direction, this made me curious. The check was accompanied by nothing in the way of explanation, other than a single line directing me to a website, www.northstarloansettlement.com.

It turns out that Northstar was returning money it had stolen from us a couple of years ago. When we were choosing a lender all the way back in 2001, Northstar made a big deal out of it’s “Bonus Program” whereby we would pay a lower interest rate if we made our monthly loan payments on time. This seemed like a good deal, so we picked Northstar, and proceeded to make all of our loan payments on time.

Then, in 2008, Northstar decided to suspend the “Bonus Program” on the grounds that it would rather keep the bonus money for itself. It announced this via a confusingly written letter which strongly implied that, while regrettable, this action was wholly legitimate and of course we were free to travel back to 2001 using our personal time machine and pick a less mendacious lender. Not long after, some lawyers filed a class action lawsuit on behalf of people like us, alleging breach of contract. Rather than go to trial, Northstar agreed to pay our money back, minus what goes to the lawyers.

This raises a couple of important points.

First, as much as people like to complain about our litigious society and lambast plaintiff’s lawyers as bunch of amoral ambulance chasers, class action litigation is a crucial source of accountability for private corporations, particularly in an economy as relatively deregulated as ours. It never for a moment occurred to me to sue Northstar, and I’m a higher education policy analyst who’s married to a lawyer. Even if it had, there’s no way I would have retained counsel to recover $27.30. And that’s on the high end of what these suits tend to yield–I’ve gotten checks in other cases for $10.00 or less.

Second, this illustrates the benefits of having the government handle students loans. To be clear: I’ve worked for government and have no illusions about its limitations. Organizations that can finance themselves via mandatory taxation and lack free market competition run the risk of becoming staid, inefficient, and insensitive to customer needs. But they also tend not to say to themselves “Hey, remember in Superman III when Richard Pryor figured out how to steal one-tenth of a cent from millions of people and used the money to buy a Ferrari? Let’s totally do that! The worst thing that can happen is we’ll have to give the money back.”

Speaking of which, the Fall semester starts in a matter of weeks and millions of students are getting their loans in order. That means that–assuming Senator Lamar Alexander isn’t the kind of person who just completely makes things up for nakedly partisan reasons–”Starting in July, all 19 million students who want government-backed loans will line up at offices designated by the U.S. Education Department…getting your student loan will become about as enjoyable as going to the Department of Motor Vehicles.” Feel free to email pictures or video of students lined up for hours at government-designated offices waiting forlornly for their number to be called so a clerk can tell them they’re in the wrong line, and I’ll post them here.