NATIONAL COLLEGIATE STUDENT LOAN TRUST – NCSLT – PER NYT $12 BILLION IN STUDENT LOANS MAY BE UNCOLLECTABLE – But Suits Against Borrowers Continue

Here’s a quote from the NYT article:

At the center of the storm is one of the nation’s largest owners of private student loans, the National Collegiate Student Loan Trusts. It is struggling to prove in court that it has the legal paperwork showing ownership of its loans, which were originally made by banks and then sold to investors. National Collegiate’s lawyers warned in a recent legal filing: “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.”

National Collegiate is an umbrella name for 15 trusts that hold 800,000 private student loans, totaling $12 billion. More than $5 billion of that debt is in default, according to court filings. The trusts aggressively pursue borrowers who fall behind on their bills. Across the country, they have brought at least four new collection cases each day, on average — more than 800 so far this year — and tens of thousands of lawsuits in the past five years.

If you are a borrower with a NCSLT loan what should you do?  Well, the answer isn’t completely simple. The problem is that if you are sued, you might have problems finding and affording a lawyer. Very few lawyers take student loan defense cases, and those who do (including me) have to charge an out of pocket fee for the defense – much like a criminal defense lawyer charges an out of pocket fee even to innocent clients.  This fee, however, is going to be a lot less than what NCSLT is claiming.

To find a consumer attorney who handles student loan debt defense in your area, go to the National Association of Consumer Advocates (NACA) “Find an Attorney” page linked here.