Missing paperwork may erase student debt for tens of thousands

Ashley Carr
July 20, 2017

National Collegiate Student Loan Trusts is one of the nation's largest owners of private student loans.

Comprised of 15 trusts, National Collegiate holds almost 800,000 private student loans totaling $12 billion, $5 billion of which are in default, court documents show.

And that mistake could erase approximately $5 billion across roughly 160,000 loans each worth around $30,000 (which is the national average).

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. And it is this trust which has reported the loss of this paperwork, which documents the chain of ownership for these loans.

Grassley may subpoena former Trump campaign chairman
In a statement Tuesday, Trump's eldest son said he was posting the emails "in order to be totally transparent". Chuck Grassley sent a letter to Trump Jr. on Thursday, NPR and other news outlets reported .


From the sounds of it, there are thousands of dutiful Americans in debt who are paying their monthly loan payments to this company that may not have to do so because of this massive issue. If you have enrolled in a for-profit college program, keep records of all of your interactions with the school and find out of you are eligible for Borrower Defense Repayment.

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

Additionally, according to a court filing, some 2,000 borrowers who have requested forbearance or other help with their loans have had their requests go unanswered because none of the parties can agree on who has the authority to make decisions pertaining to the loans. For National Collegiate, this is a high price to pay for missing paperwork. Once borrowers are sued, most either choose to settle or ignore the summons, which allows the trusts to obtain a default judgment.

Judges have already dismissed dozens of lawsuits against former students, essentially eliminating their debts because of the paperwork problem, according to the Times.

Other reports by My Hot News

Discuss This Article

FOLLOW OUR NEWSPAPER