Tags: student | loan | paperwork | missing

Loan Paperwork Missing, $5B in Student Borrowing Up in Air?

Image: Loan Paperwork Missing, $5B in Student Borrowing Up in Air?
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By    |   Tuesday, 18 Jul 2017 09:32 AM

Missing loan paperwork may be the best thing to ever happen to tens of thousands of students in serious debt after taking out private student loans to pay for college — if they're sued for nonpayment.

Some may never have to make a student loan payment again after documents have come up incomplete and missing at the National Collegiate Student Loan Trusts, according to The New York Times.

The loans in question are worth a total of $5 billion — money that creditors have taken borrowers to court for due to failure to pay their debt in a timely fashion.

However, judges have already wiped away student loan debt for several borrowers after crucial documents "proving who owns the loans" were nowhere to be found. 

National Collegiate Student Loan Trusts owns 800,000 private student loans in the U.S. for a total of $12 billion and is having trouble in court proving its ownership of several loans.

"As news of the servicing issues and the trusts’ inability to produce the documents needed to foreclose on loans spreads, the likelihood of more defaults rises," said a legal filing authored by National Collegiate's attorney's. 

According to The Week, there are four "new collection" lawsuit filings every day because borrowers have a hard time paying their monthly loan payments on time, and there have been more than 800 similar lawsuits filed so far this year.

It's not the first time National Collegiate hasn't been able to prove its ownership of some loans. 

In 2015, when the company was audited, ownership of about 400 student loans was questionable due to incomplete and missing paperwork.

Samantha Wilson, a student loan borrower and mother of three, recalled being taken to court by National Collegiate. Wilson's lawyer said the judge dismissed all four lawsuits that had been filed against her because the company "failed to establish the chain of title" on Wilson's loans." 

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Missing loan paperwork may be the best thing to ever happen to tens of thousands of students in serious debt after taking out private student loans to pay for college — if they're sued for nonpayment.
student, loan, paperwork, missing
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2017-32-18
Tuesday, 18 Jul 2017 09:32 AM
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