Scholly founder sues Sallie Mae, alleges wrongful firing and data sales

The central question in Chris Gray’s lawsuit was not simply whether Sallie Mae wrongfully fired the founder of Scholly. It was whether students who trusted a scholarship app understood how their personal information could move after a startup was absorbed by one of the nation’s biggest student-loan companies.

Gray sued Sallie Mae on allegations of wrongful termination and data sales through a subsidiary, turning a once-celebrated startup deal into a test of oversight, consent and the safeguards students actually have when their information shifts from a founder-led app to a large financial institution. Sallie Mae denied the allegations and said it would fight them.

Sallie Mae announced the acquisition of key Scholly assets on July 26, 2023, saying it would make the app free for all students, families and other users. The deal went beyond the search app itself. Sallie Mae said it was buying Scholly’s scholarship administration technology and Scholly Offers as well. Gray later said the company first approached him in February 2023 about a partnership before the talks became an acquisition.

Scholly carried a strong origin story long before the dispute. Gray, who founded the company, has said he raised only about $400,000 and kept most of the equity. Public materials have said Scholly helped students secure more than $100 million in scholarships and had more than 5 million users. In a 2024 Scholly and ABC Shark Tank update, the app was described as free for all students and families under Sallie Mae ownership.

That history gives the lawsuit broader significance. Scholly emerged as a tool for widening access to scholarships, especially for students trying to pay for college without taking on more debt. If the company’s user data was being monetized in ways Gray now challenges, the case could sharpen scrutiny of how education-finance firms balance growth with consumer trust.

The backdrop is a lender that remains closely watched. The Consumer Financial Protection Bureau had previously expanded supervision to Sallie Mae and other nonbank student-loan servicers over concerns tied to borrower complaints and oversight. Sallie Mae has also continued to emphasize growth in its private student-loan business, reporting $22.1 billion in average loans outstanding, net, in the fourth quarter of 2024 and $22.6 billion in the second quarter of 2025.

Gray has also said the acquisition drew pushback from some in the Black community, underscoring how much Scholly’s meaning extended beyond a single app or a single employment fight. The suit now places that cultural legacy alongside a harder question for the student-finance industry: who controls student data after the deal is done, and what limits, if any, still apply.