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Missing paperwork may erase student debt for tens of thousands

Missing paperwork may erase student debt for tens of thousands”

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.

It depends. The loans in question are owned by National Collegiate Student Loan Trusts, so if your loan is owned by someone else, the chances appear to be slim. The College Board estimates that the average cost of attending a for-profit institution is $16,000 a year, roughly 4.5 times more than the cost of the average two-year college, and 1.7 more than the cost of the average four-year public college for in-state students. The group says the creditors aggressively pursued them in court after they fell behind on payments, according to the New York Times. The trust organization is facing trouble proving in court that it has the legal paperwork to prove ownership of its loans. These private loans were not guaranteed by the federal government, which is the nation's largest student loan lender.

The troubled loans that have gone into default total at least $5 billion.

Has National Collegiate sued me for nonpayment? So, basically, this haphazard record-keeping means that if the trust attempts to go after a student or graduate who has defaulted on their loan, they might not be able to serve the call and, instead, have to write off the entire amount of the debt. Because of those steep rates, the size of the loans can quickly balloon, leaving borrowers to pay hundreds and, in some cases, thousands of dollars each month.

Judges nationwide have dismissed suits filed by the NCSLT, including in Ohio, New Hampshire and Texas, asserting that the organization can not prove that it owns the debts.

"It's a numbers game", lawyer Richard Gaudreau, who has helped defend borrowers in several National Collegiate lawsuits, told the newspaper.



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