5 Billion in Student Loans Possibly Erased Over Lost Paperwork
The National Collegiate Student Loan Trusts was trying to collect from borrowers, but their cases are being thrown out for one particular reason - lack of paperwork. It seems like someone misplaced, or doesn't even have, paperwork coorelating to the loans for which they're trying to collect on.
Judges seem to be throwing these cases out the window like a bad habit due to the lack of proper paperwork that proves they even have ownership of previously mentioned school loans.
The National Collegiate Student Loan Trusts, one of the largest owners of private student loans in the U.S., has sought to collect from borrowers only to have cases dismissed due to lack of proper documentation, the New York Times reports.
National Collegiate holds as many as 800,000 private student loans, worth about $12 billion. Of those, roughly 166,000 loans, worth some $5 billion, are in default. The loans were originally sold by banks and then purchased by National Collegiate, though ownership records were lost in the process.
National Collegiate has to provide evidence that they have ownership of the loans. If they fail to provide that evidence, then they might have the loans tossed out by a judge. The inability to maintain the proper paperwork could literally eliminate billions in loans for students.
As you can guess, college students affected by this are probably rejoicing if their loans are magically wiped away.
Could you imagine waking up one morning, sipping your first bit of coffee, then realizing you're free from your college debts? What a great way to start the day!
One should always repay their debts, but if a company mishandles the loans and you get out of debt for free, then take it and run!