Chris Gray, founder of the Shark Tank-backed scholarship app Scholly, has filed a lawsuit against Sallie Mae alleging wrongful termination and data privacy violations.
Gray claims Sallie Mae fired him after he raised concerns about the company selling Scholly users' personal data, including that of minors, to third parties without proper consent.
Scholly's Rise from Shark Tank Fame
Scholly was co-founded by Gray in 2013 to help students discover scholarships based on personal criteria like GPA, race, and financial need.
The app gained massive traction after appearing on Shark Tank, securing investments from Daymond John and Lori Greiner amid a heated pitch battle.
By the time of its acquisition, Scholly boasted 5 million users and over $30 million in cumulative revenue.
The Controversial Acquisition by Sallie Mae
In July 2023, Sallie Mae acquired Scholly, with Gray joining as VP of Product Management under promises to keep the service free and protect user data.
However, Gray alleges Sallie Mae created a non-bank subsidiary, SLM Education Services, to circumvent banking regulations and monetize user data through sales to advertisers and universities.
This included sensitive information like names, emails, geolocation, and education records funneled into ventures like Backpack Media targeting Gen Z students.
Impact on Student Privacy and EdTech Future
The lawsuit highlights growing concerns over student data privacy in edtech, potentially affecting millions who trusted Scholly for scholarship aid.
Gray also filed a whistleblower complaint with the SEC, seeking backpay, punitive damages, and legal fees in the Delaware Superior Court case.
Sallie Mae denies the allegations as baseless, vowing a vigorous defense amid its history of past lending controversies.
Looking ahead, the case could reshape acquisition ethics in fintech and prompt stricter oversight on data handling in education platforms.
Andrew Lee
