Judges across the United States are wiping away student loan debts worth, in some cases, tens of thousands of dollars, all because National Collegiate Student Loans Trusts has been unable to show in court that it owns the loans it says it does.
National Collegiate is comprised of 15 different trusts, holding 800,000 private student loans. Those loans add up to $12 billion, and more than $5 billion is in default, court records state. The private loans were made by banks, then sold to investors, and when the borrowers struggle to pay these loans — which often have high interest rates — back, National Collegiate takes them to court; on average, at least four new collection lawsuits are filed every day, The New York Times reports, and more than 800 have been filed this year so far.
When borrowers don’t go to court, National Collegiate almost always automatically wins the case, but when they do show up, most of the time judges throw the suits out because National Collegiate was not able to produce the paperwork proving it owned the debt it said it did. An audit of the company, organized by one of the financiers behind National Collegiate’s …read more
Source:: The Week – Business