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The suit filed Monday in federal court in Los Angeles accuses Northstar Higher Education of breaking its contract with students.
According to the lawsuit, the lender eliminated a 0.75 percentage point interest-rate reduction to cope with the credit crunch.
The lawsuit, which was filed on behalf of a California woman, said financial difficulties don't give Northstar Higher Education a license to breach contractual obligations.
An attorney for the lender said the firm has yet to receive a copy of the complaint. But company attorney Mark Lindgren said Northstar believes it fully complied with terms of its agreements.
Northstar stopped taking applications for federal loans in April but recently began accepting them again.
