Have you taken out a private student loan to fund your education?
Overall, there is about $1.3 trillion in outstanding student debt among Americans, Time Magazine reports. At least $5 billion in loans is now being disputed in court, as private creditors, who have pursued lawsuits against against student loan borrowers that have failed to meet their payments, have struggled to produce paperwork that prove who owns the loans.
Donald Uderitz, the founder of the private equity group that is the beneficial owner of National Collegiate's trusts, said he wants the group to end its lawsuits against delinquent borrowers, unless it can prove that it owns the loans. 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. If it's a loan we're owed fairly, we want to collect. And it is this trust which has reported the loss of this paperwork, which documents the chain of ownership for these loans. There are additional considerations.
Judges have dismissed dozens of lawsuits against graduates who fell behind on payments because the organization could not prove it owns the loans.
Document: National Collegiate's Audit of P.H.E.A.A. They aggressively hound student borrowers who fall behind on their bills and have brought tens of thousands of lawsuits against defaulters in the past five years. Smith, of the National Consumer Law Center, recommends finding a lawyer who specializes in debt collection and credit reporting issues through the National Association of Consumer Advocates' search tool. This means that there is no national tally of just how often National Collegiate's trusts have gone to court.
While they usually come out the victor, there have been instances in which borrowers prevailed because documentation proving ownership wasn't provided.