Chris Gray is suing the company that acquired his college scholarship startup.
As AFROTECH™ previously told you, Gray is the founder and was CEO of Scholly Inc., which was driven by a mission to help students eliminate their college debt. The organization helped deliver more than $100 million to students for their higher education. The startup also secured interest on “Shark Tank” from Daymond John and Lori Greiner, who agreed to a $40,000 investment in exchange for a 15% equity stake.
In 2023, Scholly was acquired by banker Sallie Mae. On the “Black Tech Green Money Podcast,” Gray said $400k had been raised leading up to that point, while he retained a majority equity stake in his company. He noted it was “ultimately my decision to sell.”
“The Sharks and other people, when you take someone else’s money, they have to get it back,” he explained on the podcast at the time. “And nine times out of 10, they have to get that back through an exit. And that’s something that isn’t well known in the mainstream Black community. That capital cannot be taken without it being returned. And an exit is the way to do that.”
According to Techcrunch, Gray and his co-founders transitioned to roles at Sallie Mae following the acquisition. Gray served as vice president of product management, helping the company grow and remain free for users. However, after the acquisition, he and his co-founders were laid off from Sallie Mae.
Soon after joining Sallie Mae, Gray became aware of discussions about selling user data, though before selling Scholly, he was under the impression that Sallie Mae would be barred from selling or disclosing Scholly’s user data to third parties since it was a federally regulated financial institution, noted TechCrunch. When he raised these concerns almost a year after the acquisition, Gray was laid off.
“I sold Scholly to a regulated bank because I believed it would protect the students who trusted us,” Gray told TechCrunch. “Instead, I watched the company build a non-bank subsidiary to do things the bank itself can’t legally do: sell student data. That’s not the company I thought I was joining.”
Gray filed a lawsuit in Delaware Superior Court and submitted a complaint to the Securities and Exchange Commission, alleging that Scholly sold user data — including age, gender, race, and other factors that can determine financial need — to third parties, including universities and advertisers. He claims students could be misled by the company’s privacy policy.
Per TechCrunch, shortly after Gray’s firing from Sallie Mae, the company formally launched “Sallie.com,” an education solutions company owned by SLM Education Services.
According to Sallie.com, the platform offers students and families tools, resources, and guidance to help learners prepare and pay for college.
Scholly also lives on this website. Gray claims Sallie Mae is leveraging SLM Education Services to sell the personal data collected through Scholly, as it won’t be under the same microscope as a financial services company, per TechCrunch.
On Sallie.com’s privacy policy page, it notes that SLM Education Services sells data such as a user’s name, phone number, email addresse, ages, race, gender, education record, and geolocation to third parties, including networks, educational institutions, brands, and companies that resell consumer data.
Gray told TechCrunch that Sallie.com could easily be mistaken for Sallie Mae’s banking website due to its layout and logo similarities. Gray also noted that Scholly’s user data informed the launch of Sallie Mae’s Backpack Media initiative, which — according to a press release — is a” first-to-market education media network that connects brands to high-intent moments across the student journey,” giving them access to “hard to reach audiences” like Gen Z and Gen Alpha.
Sallie Mae has responded to Gray’s claims, calling them “without merit,” according to TechCrunch.
“While we don’t comment on pending litigation, it’s unfortunate a former employee is making false accusations about our company following his departure nearly two years ago. We plan to vigorously defend ourselves against these claims which are without merit or substance,” Rick Castellano, the company’s vice president of corporate communications, said in an email to TechCrunch.
Gray hopes to receive back pay and punitive damages and is seeking compensation for legal costs.
