As college education costs continue to rise, more and more students are finding themselves buried in debt. American borrowers owe over $1.4 trillion on student loans, with $100 billion in private loans offering few consumer protections.
National Collegiate Trust is one of the nation’s largest holders of private student loan debt, a company known for its aggressive – even unscrupulous – collection methods.
Many students are struggling to keep up with their loan payments. For some, the only way out may be to declare bankruptcy – but even then, collectors may not give up easily.
You might think that there’s nothing you can do to fight back against a collection action from National Collegiate Trust. But you would be wrong – there are steps you can take to protect yourself and defend your rights.
In this article, we’ll tell you everything you need to know about National Collegiate Trust: what the company is; the mistakes it has made in the past; and most importantly, how you can beat them in court. With this information, you’ll be able to take on National Collegiate Trust confidently and come out victorious.
What is Exactly The National Collegiate Trust?
National Collegiate Trust is an entity that buys private student loans and packages them into securities that investors can buy. By doing this, NCT provides a service to both students and investors. Students are allowed to finance their education through loans, and investors can profit from the eventual repayment of those loans.
NCT benefits as well by collecting a fee for facilitating the transaction.
NCT has a vested interest in making sure that student loans are repaid since that is how it makes money. As a result, it employs aggressive debt-collection practices to ensure borrowers fulfill their obligations.
Is National Collegiate Involved With My Student Loans?
National Collegiate Trust is in the business of buying student loans from other lenders. This is often done after the loan has already been given out. Here’s a look at how this process works.
When you first take out a private student loan, you do so through what is called a loan originator. This could be a bank like JPMorgan Chase, Charter One, or Bank of America. The originator then lends you the money and sells the loan to a depositor. National Collegiate Trust acts as a depositor of private student loans.
It’s important to note that National Collegiate Trust does not provide student loans itself – it simply buys them from other lenders. So don’t worry if you receive correspondence from National Collegiate Trust – it’s just part of the process!
As more and more students graduate with loan debt, private lenders like National Collegiate are working to ensure that they get their money back. Servicers are hired to send out billing statements and collect payments from borrowers. However, even though the servicer’s name is on the bill, the lender is still the owner of the loan.
Defaulting on a private student loan can have serious consequences. The lender may hire debt collectors or file a lawsuit against the borrower. National Collegiate Trust is one of the biggest private student loan lenders in the country, so borrowers who are being harassed for payment should be aware that this company may be behind it.
Complaints of National Collegiate
National Collegiate Trust is in hot water with the Consumer Financial Protection Bureau. The bureau found that the company had been using student loan borrowers for loans that it couldn’t prove it owned or for loans where the statute of limitations had passed.
This led to federal regulators taking action against National Collegiate Trust.
As a result of its actions, National Collegiate Trust was hit with federal penalties totaling more than $19 million. The company also had to set aside $3.5 million to refund 2000 student loan borrowers.
Legal Problems at National Collegiate Trust
The best thing about the CFPB’s enforcement action is that it gives student loan borrowers a clear roadmap on how to beat National Collegiate Trust and other aggressive loan holders in court. Here’s a summary of the key points:
First, for National Collegiate Trust to win a debt collection lawsuit against you, it must be able to prove that it owns your student loan. The proof must come in documentation showing that the National Collegiate bought the loan from the originator and currently holds it.
However, the CFPB has demonstrated that National Collegiate Trust often has difficulty keeping accurate records.
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Second, even if National Collegiate Trust has the documentation to show that it owns your loan, it might still be unable to collect on the debt.
Furthermore, National Collegiate may have difficulty winning a debt collection lawsuit unless it can prove that it attempted to collect the loan within the time frame allowed by law. Each state has a “statute of limitations,” which sets a specific time during which someone can try to collect on a debt. So, for example, in states where the statute of limitations is five years, National Collegiate would not be able to legally try to collect on a loan over five years overdue.
National Collegiate Trust is suing you for your outstanding student loan debt. But don’t worry; there are ways to fight back against this lawsuit.
First, you need to file an Answer as soon as you receive the lawsuit in the mail. In your Answer, demand that National Collegiate Trust provide documentation proving that it owns your particular student loan.
Another defense you can use is the statute of limitations. The statute of limitations has already expired on your student loan debt, be sure to assert this in your Answer.
By taking these steps, you can force National Collegiate Trust to prove its case and hopefully get the lawsuit dismissed.
The best thing about facing National Collegiate Trust instead of avoiding them is that you have a good shot at getting your whole student loan debt discharged. This can happen either because National Collegiate Trust won’t be able to produce the paperwork to show they own your loan or because the statute of limitations has expired.
It’s worth fighting because getting the debt wiped out will improve your credit score.
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