Students seek loans for their education fulfillment especially in colleges. They need funds for entering educational institutions as well as for recurring needs such as paying for books or custom papers. Students can get money for those needs in particular from the National Collegiate Student Loan Trust.
The moment you read “National Collegiate Student Loan Trust,” what rings in your mind? Well, I imagine the New York Time Magazine that indicated $ 5 billion loan due to be wiped out. The National Collegiate is a group of trust entities that buy students’ loan accounts. Recently, this enterprise faced issues regarding loan repayment. Such repercussions come as a result of their problem of numerous changes of accounts into different hands to the extent of losing much of the paper trails. As a student, you are glad to be among those who took a private loan for college since might be part of the $ 5 billion debt. As a result, the legal technicality might render your share wiped out. So hold your smile for a while. The truth is that there is a 50 percent chance the courts wipe out all the loans due to the absence of the paperwork.
Well, it is hard to deny the bright smile in your face masking the guilt of defaulting in paying back a loan debts for your education. Thanks to the National Collegiate Student Loan Trust that has over 800,000 private loans to mismanage the records that have no verifications. The enterprise could not correctly locate the owners of the loans, according to the New York Times. Therefore, the borrowers are currently failing to repay over $ 5 billion of all the $ 12 billion in private student loan hence making such loans default.
The unending chase seems to exist as the loan borrowers fight lawsuits. In most cases, the loan borrowers show up in court with their arms high with a group of counsel to fight cases that are dubious with no clear evidence. The borrowers seem confused most of the times with no clarifications and missing paperwork on the exact people who own them loans. Besides, National Collegiate Student Loan Trust is not able to prove their claims that indeed they know the defaulters of the loans. Therefore, as a student who is a defaulter, it is the time to have the audacity to smile.
Mistakes that the borrowers made include presentation of the blank papers that prove the ownership of the loans coupled with nonspecific documentations regarding the particular loans that were transferred to various clients. Judges have dismissed numerous cases against students hence wiping out their debts due to poor documentation that does not prove the loan owners. Most of the court records as per the New York Time review indicate incomplete ownerships, flawed documentation, and mass-produced documentations.
A presentation of such information in a law court is a disaster to the borrower depending on the state law and interpretation of the judges. For example, an accurate judge from a state would demand clear information revealing the various chains of transactions or paper agreements that link a student to the loan debts to all the owners up to the borrower. Under such circumstances, there is no short option than to provide all the loan documentations with all the terms and conditions as well as the signatures and agreements concerning the loan. Also, the judge would require precise information regarding the rights passed from the initial lender through all the intermediaries until the student. However, if the borrower is not in a position to prove all the debt information, then such debt is unenforceable.
In different cases, the representatives of the National Collegiate Student Loan Trust or the debt collectors pray so that the borrowers don’t show up on the agreed dates or do not challenge the cases. Such circumstances render the borrower loses the case. However, some seek other alternatives to get money, in particular through wage garnishment. In most cases, many students’ loan markets are redolent of issues that happened during the subprime mortgage predicament over the last ten years.
During such time, billions of dollars in the subprime mortgage were wiped out due to their uncollectible means are ruled by the court at the time, and private student loans were a greater percentage. The loans were realized that they had higher rates of minimal consumer protection compared to the federal loans. All the problems concerning the private student loans arose amidst the warning by the National Collegiate Student Loan Trust lawyers against servicing issues, trusts as well as inability to provide proper documents for the foreclosure on the loans spreads within intermittent rise in defaults.
An incident of improper documentation was a file of a lawsuit by the National Collegiate Student Loan Trust that unleashed a case against 33-year-old Samantha Watson who pursued her education at the Lehman College in the Bronx in 2013 studying a degree in psychology. Ms. Watson acquired a private loan to pay for her education. However, she got into trouble getting the fine print especially issues regarding interest rates. The borrowers assured her that all should be well.
She strived to make some payment on the loan but she fell behind due to family issues especially her sick daughter. Later on, the National Collegiate sued her for the case. However, the paperwork and documentation had problems since the borrowers did not indicate the college she attended and even the payment that she had already remitted for the loan. Consequently, the Judge Eddie McShan of the Civil Court in Bronx, New York City dismissed the entire four lawsuits against Ms. Watson. The judge found out that the borrower failed to establish the chain of title on the loans entirely. In the end, the judge wiped out $ 31,000 in debt hence it was a relief to Ms. Watson.
In a nutshell, the issue of loans’ wiping out is not yet at its end. Several cases in New Hampshire, Texas, and Ohio have tossed cases by the National Collegiate based on fraud since the borrowers are unable to prove their ownership of the debt they are due to collect. In most cases, these trusts are on the winning spree since borrowers fail to show up to fight for such receivables.
Therefore, the National Collegiate still faces many issues regarding the loans since following the vulnerable process of securitization where many banks put money together and sell to investors without a proper guarantee from the federal government hence the debt passes in different hands before reaching the National Collegiate trusts with no proper documentation of the loan ownership.