$5B in Student Loan Debt Could Be Gone Thanks to Missing Paperwork

As Least $5 Billion Of Private Student Loan Debt May Be Erased Because Of Missing Paperwork
A graduating student's cap during City College graduation
Author

20 July, 2017

Those private loans were not guaranteed by the federal government.

But according to a New York Times report this week (paywall), the trusts have been failing in court to produce the legal paperwork showing that they actually own numerous $5 billion in loans now in default, meaning that judges across the country have already dismissed dozens of the trusts' lawsuits against students.

The National Collegiate Student Loan Trusts "is struggling to prove in court that it has the legal paperwork showing ownership of its loans", the newspaper said.

Are my loans owned by National Collegiate? . Other times, the NCSLT drops suits when contested by borrowers. But National Collegiate trusts don't own all of the loans by made by these lenders, and these aren't the only lenders that sold loans to National Collegiate. The group of trusts is one of the largest owners of private student loans in the US and has brought tens of thousands of lawsuits against borrowers who've fallen behind on their payments.

Has National Collegiate sued me for nonpayment?

Some college graduates may not have to pay off their student loans thanks to a clerical error.

Skydiver sends horrifying video message to his wife before final jump
The United States Parachute Association recorded 3.2 million parachute jumps a year ago , 16 of which were fatal. The couple both worked at United Parachute Technologies , a company that makes containers for parachutes.

The 15 trusts have led a serious offensive to track down the borrowers who fall behind on their student loan payments. The missing documentation may mean tens of thousands could be off the hook for paying back loans.

And private loan borrowers disproportionately attend for-profit colleges.

The trusts win numerous lawsuits they file automatically, because borrowers often do not show up to fight.

Lawsuits against borrowers who have fallen behind on their consumer loans are typically filed in state or local courts, where records are often hard to search.

Missing paperwork could wipe out billions...

Very few cases ever make it to trial, according to court records and borrowers' lawyers.


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