WILMINGTON, Del.: Christopher Gray, who sold his scholarship-search startup Scholly to Sallie Mae in 2023, has sued the student-loan company in Delaware Superior Court, alleging wrongful termination and the improper sale of user data collected from roughly 5 million people, including minors. Gray filed a parallel whistleblower complaint with the U.S. Securities and Exchange Commission earlier in April 2026. He is seeking back pay, punitive damages, and legal costs.
The complaint claims Sallie Mae fired Gray in July 2024, one year after the acquisition closed, after he raised concerns about plans to monetize Scholly’s user data. Gray says the data set includes age, gender, race, and financial information collected from students and their families. Sallie Mae has denied the allegations and said it intends to fight the suit.
How an Asset Purchase Reshaped Scholly After the Sale
Sallie Mae announced the deal in a July 2023 press release as an acquisition of “key assets” rather than the company itself. The release listed the scholarship search engine, the Scholly app, the scholarship administration technology, and Scholly Offers, a cash-back partner platform. Sallie Mae said it would not disclose terms because the price was “not material to the company.”
Asset purchases differ from stock acquisitions in a way that matters for founders. The acquirer takes the technology, the customer data, and the staff it wants, but it does not buy the company entity, the cap table, or the obligations attached to them. Founders typically come over as employees, on terms the acquirer sets and can revise.
Gray and his co-founders joined Sallie Mae after the close. Gray was named a vice president of product management. According to the complaint, the founding team was laid off in July 2024, twelve months after the deal. The lawsuit says Gray was terminated before a scheduled meeting with the chief executive at which he planned to raise the data-sale issue.
What does the Scholly lawsuit allege about Sallie Mae’s data practices?
The complaint alleges Sallie Mae routed Scholly’s user data through SLM Education Services, an affiliate outside its regulated banking arm, and used it to build Backpack Media, a marketing network launched in March 2026. Backpack Media is pitched as access to Gen Z, Gen Alpha, and the adults involved in their purchasing decisions.
That framing is the heart of Gray’s case. He argues that users handed over personal information, including data from minors, to find scholarships, not to be sold into an ad network. The complaint says Sallie Mae executives discussed the monetization strategy internally and that Gray was fired after raising concerns. Sallie Mae says it followed its privacy policies.
The dispute will likely turn on what Scholly’s privacy policy permitted at the time of collection, what Sallie Mae’s policy permitted after migration, and how data covering users under 18 was handled under federal and state child-privacy rules.
Why the Scholly Case Matters for Founders Selling to Incumbents
Scholly’s origin story is well known. Daymond John and Lori Greiner cut a $40,000 check for a 15 percent stake on Season 6 of Shark Tank in 2015. By the time of the 2023 sale, the app had helped users secure more than $100 million in scholarships and generated more than $30 million in cumulative revenue. John has said publicly that the exit was one of his best Shark Tank returns.
For other founders, the more useful lesson sits in the structure of the deal. An asset purchase gives the acquirer full ownership of the underlying customer data on day one. Without specific contractual covenants, the acquirer can change the terms of use, route data through affiliates, or fold it into new products. Founders who stay on as employees have only the bargaining power their employment agreement gives them, which usually is not much.
Gray’s case is a working example of the gap. He moved from chief executive to vice president, lost the founding team a year in, and now alleges he was fired for asking how the data would be used. Whether or not the suit succeeds, the underlying mechanics are common in incumbent acquisitions of consumer apps. Founder accountability after a sale is shaped less by intent than by the documents signed at close.
What’s Next in the Sallie Mae and Backpack Media Dispute
Sallie Mae will respond to the complaint in Delaware Superior Court in the coming weeks. The SEC whistleblower complaint is not public, and the agency does not confirm investigations. Sallie Mae’s next quarterly earnings report and any updates to its privacy disclosures will be the next places to watch for material developments.
Investors and policy observers will also track Backpack Media’s launch trajectory. The product was announced in March 2026 and sits at the center of the data-use claims. Any change to its rollout, partner list, or audience definition will signal how Sallie Mae plans to defend the unit while the litigation runs.
