National Collegiate Forgiveness

If you ever got sued for a student loan by the National Collegiate Trust, there is a high chance that you do not know about them and have no idea about their relation to your student loan. This article covers key aspects of the company as well as guides you through the process. If you have a private student loan from a particular organization or bank, there is a high chance that National Collegiate Trust is involved in this process. How? Let’s define the company, their area of interest so that we can clearly understand the company, its objectives, and give solutions for students who were impacted by the national collegiate student loans.

Who is the National Collegiate Trust?

The company is not a student loan lender, nor are they servicer of your student loans. They are a private company that works with several student loans and buys them from banks as an investment. Due to the complex working mechanism of how trusts and these companies work, it is hard to estimate where your loans will end up.

How Banks involved in the process?

As you already know, there are two significant types of student loans. The first one is federal student loans, and the second is private. This case is more related to federal student loans; that is why it’s important to highlight these areas. As you may understand by its name, federal student loans are generated directly from the U.S. federal government. Not every student finds a chance for themselves, so some of them look at the banks as an alternative. The reason for that is: tuition fees are high, and federal loan opportunities are not enough; banks provide a much-needed avenue for college financing. Several banks offer these services. The most popular ones among the student preferences are:

  • Bank of America, N.A.
  • JPMorgan Chase Bank, N.A.
  • Charter One Bank, N.A.
  • Union Federal Savings Bank
  • RBS Citizens, N.A.

These banks are the originators in the student loan securitization process.

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The National Collegiate Funding LLC

After you apply for a federal student loan, your loan gets transferred to the company that is called The National Collegiate Funding LLC. The entity comes on this stage as the loan processor and takes advantage of student loans. They hang onto the student loans until banks completely transfer them into the Trust. The company does not collect the money from your student loan. So what do they do? They take the loans and deposit them into student loan trust. We can define them as depositors in that sense.

Who collects the money from Student loans?

On the student loan, some have to collect the money. As we come up with information that neither the bank nor the national collegiate student loan trust companies which in this case are the depositor receive it. So who does? In this phase, the servicers are the companies that collect the student loan money. Each month, they send bills to the customers (students) and handle everything else related to accounting. What do they get in return? The trust organizations pay servicers in return for their acts.

National Collegiate Student Loan Trust

The number of National Collegiate Student Loan Trust entities is higher than you expect. Several companies identify themselves like this. Several numeric codes identify those organizations. For example, there are national collegiate student loan trusts 2007-2 or NCSLT 2007-3, and more. Those trusts hold several various student loans, and students owe them money as a result of the process that we mentioned earlier. For instance, the debt amount for private student loans to the NCSLT is around $1.465, 000,000.

What happens to your student loans once they get into Trust?

National Collegiate Trust is a complex process to understand; nevertheless, it is essential to know that once student loans get to the Trust, they start to sell the bonds to investors. Why do investors want to get it? Each bond gives the investor a chance to get distributions from the trust organization. That distribution is calculated according to the number of private student loans. Investors pay a certain percentage of the student loan to the trust organization. So, according to that percentage, they get back the distributions once waivers clear out. In cases where so many student loans go into default, the trust organization cannot pay enough money to the investors.

How investors minimize these types of risks?

There are two popular ways that investors use to minimize the risk of getting profit from student loans. The first one is choosing between riskier and safe loans and convert them to the Trust whenever investors see a threat. The second option is more interesting, because it is directly related to the guaranteed student loans. Until 2008 TERI (The Education Resources Institute) was working as a guarantor for student loans. Though in 2008, the company filed for bankruptcy because of the rising number of student loan defaults.

Who owns your student loan?

It is hard for a student to know where their loan will end up at the end because if we take into consideration the fact that trusts take them after a student applies and gets the loan, there are several trust organizations, and that makes it even more challenging to find. Private student loan securitization is a colossal mess that led to concerns by students. They do not provide any evidence regarding the transfer of the individual loans from banks or private organizations to the depositor.

How to get a discharge or a refund from National Collegiate trust?

As we’ve already mentioned, National Collegiate Trust does not have much evidence regarding the transactions and many more related issues that are conducted between students and these organizations. Thus, $5 billion can get forgiveness thanks to this lack of paperwork by Trust organizations. The New York Times reports that thousands of students who got robbed by these organizations and student loans that they bought from them can get rid of all the debt amount in no time. Private student loans do not entirely work as free ones though this new rule may help private student loan borrowers in advance. Debt collection agencies who are inspired by National Collegiate Student loan trust organizations might be in big trouble because those students can discharge from the loans according to the recent news. 

What does this mean for students?

As mentioned earlier, NCSLTs are depositors who worked with several student lenders and made them suffer huge debts for years. With new updates in the cases, although National Collegiate Trust sues students for the loan debt, they cannot prove that those students owe them any money whatsoever. Not only private student loan lenders will be disappointed in this news, but also other student loan types are included in the case as well. 

This is the most exciting part of the new updates of the case for students. While researching Trust organizations, the New York Times found out some interesting facts about student records. They reported that, besides private student loans, there are hundreds of cases where trust organizations are suing students. However, they have incomplete transaction records, which makes us believe that there were fraudulent practices towards students. 

The case is very complicated because most of the student loan debt collectors and lenders in the industry want to take their money back. Though, they cannot prove who owns the student loans. For students, the best advice would be searching for those records to see if something is missing or not. If you can prove that legally you are not bound to pay any money to them, then you will get complete discharge from the student loan debt amount. It is the loophole that students need to know and search for more ways to wipe out their student loan debt. 

What to do in case if National Collegiate Student Loan sues you?

When some organization decides to sue you for the student loan debt, there are some aspects that creditors must prove in order for you to become eligible for paying that particular amount. Those aspects need to include:

  • The company that sues you has the right to do so because they own your private student loan.
  • You took a loan from a particular agency/bank.
  • The amount of money which the suing company argues is the accurate amount of your debt

Promissory note plays a massive role in this type of case. Most of the students want to find an answer to the question, which is:

Can National Collegiate Trust organizations prove that students owe them money?

It depends, and there is no answer to this question before specific investigations find whether or not there is a proper promissory note and whether or not the Trust has the signed copy of this note. Besides that, to find out the answer to that question, we need to look for more evidence. If the National Collegiate Trust company can prove that they legally bought the loan from the original lender, then the answer would be yes, if not, the answer would be no according to the recent updates on the issue. 

How to prove that the debt amount is shown correctly or not? The Trust company-depositor needs to show evidence regarding the debt amount and proper accounting of that amount while they sue you for not paying back the student loan debt. There are more complicated sides to these types of issues. Therefore, it is better to research the case, analyze the personal issue with trust organization, and then decide if you owe them money or not. 

National Collegiate Lawsuit

There are certain settlement terms that students need to be aware of regarding the proposed judgment. CFPB and National Collegial Trust agreed on specific conditions. Here you can find the initial ideas that you need to know about the settlement.

The NCSLT should audit all the student loans that they have and must prove that they have a relevant document that shows the legal ownership of student loans.

The NCSLT must stop involving inactions regarding the collection of student loans, which they are not sure whether they have a legal document for or not. The total outstanding student loan amount is more than $5 billion.  So, that is the main reason why the National Collegiate Trust does not want to lose money post investigations.

If CFPB finds out that NCSLT sued the students without any reliable paperwork, then the National Collegiate Student loan organizations would have to repay the money and delete all the debt amount from their accounts. Any student who is legally pursued by NCSLT has a high chance to get student loan forgiveness. As we already stated, the National Collegiate Trust organization does not have proper documents with official signatures of both parties. So, if you are one of those lucky students who the company sued and cannot prove themselves regarding the loan transfer, then you will get full student loan discharge.

Can you get complete student loan discharge for private loans?

The excellent news for all suffering students is that they can get complete loan discharge according to the recent updates on this case. Whether your loan lender is a private company or an investor, you can still get debt relief. But how? By challenging the legal validity of the provided documents, you can get a better chance of eliminating the student loan debts. You need to act quickly and solve the issue before it is too late. Find an agency or lawyer that can guide you during the process. In addition, you need to find out the loopholes in the system so you can get loan discharge quickly.

Who is to blame?

Across the U.S., National Collegiate Trusts receives some lawsuits and rightfully so. They are to blame in this case, and students should know that. Why? The reason for that is NCSLT did not originate any of the student loans that they ask students to pay for. The students went to banks and took private student loans. Then, those loans then transferred to the investors, and then those investors asked these organizations to recover the outstanding debt amount. These trusts did the dirty work of those multimillionaire investors. Right now, they face several court cases because of that.

They threatened students with lawsuits, and sued them. Besides, try to force them to pay for the loans which they are not bound to pay for. The national collegiate Trust is a huge corporation that consists of 15 trusts and has 12 billion dollars. Although they are a large company, all they do is to get the student loan with outstanding amount and try to force students to pay back. They do not offer any other service or whatsoever. They deserve all the legal actions that the U.S. government and CFPB take against them. 

How did they get here?

As soon as students get delays on a monthly basis, the National Collegiate Loan Trusts started all the legal proceedings against students. Since 2012, they have started over ten thousand lawsuits against ordinary students. It is not about the amount per se; in most cases, the students who got engaged in trials have only $10,000 in their accounts. For example, one strange case happened in 2014, where the National Collegiate Student Loan Trusts attempted to sue Jason Mason. The student who had only $11,000 left on his deal. Imagine a multibillion corporation suing a guy who has only $ 11.000 in debt for the student loan that they do not own.

It is ridiculous, and those people should be accountable for their actions. In that same case, NCT could not prove that Jason owes them that debt amount. The reason was the same -they lost the paperwork for this case as well. So, they could not prove it, and Jason got rid of all his student loan debt.

Tide’s Turning against NCSLT

For decades, thousands of students have been suffering from fees, the debt amount, and lawsuits because of these trust organizations. The new lawsuits in New Hampshire, Texas, and Ohio made NCSLT payback for their illegal acts. Bankruptcy discharge for private student loans helped students to save themselves from ongoing lawsuits against them. The students who gave up the fight against these trust organizations could not get what they deserve. Though the students who fought for their rights got complete loan discharge. These types of cases raise acknowledgment in society. It helps those students who do not have enough information about recent updates regarding National Collegiate trust.

Apply for Student Loan Forgiveness Help

If you struggle with university student loan forgiveness, then you should get help with that. Because the employees in these agencies are dealing with the student loans every day and they have enough experience for solving different kinds of student loan problems.

How can you Protect Yourself from National Collegiate Trust Lawsuits?

The first recommendation is to hire a private student loan attorney to look into your case. You need to make sure that you hire an experienced student loan attorney who can help you during this process. Do your research and hire the most reliable person who can help you.

Debt Validation is the second option that you need to do. If you can prove that the information which the Trust present is not correct or have some flaws (missing key documents, wrong names, addresses, misspelled, amount of the debt is wrong, etc.) You can raise the issue and get rid of the lawsuit along with the debt amount. An experienced private student loan attorney can help you solve this issue as well.

Negotiating the case with lawyers is another path that you can take. Lawyers will recommend you to use debt settlement. A Debt Settlement is an agreement between you and the trust organization about the amount of debt that you are going to pay back. You can get huge discounts and eliminate debt amounts to some extent by using this method. Besides these methods, you can fight back the default judgment as well. If the court decision is against you, do not worry. You still have a chance to prove them wrong by fighting back with default judgments.

Enforcement actions against CSLT

According to the U.S. law (Dodd-Frank Act), the respective bodies of the government can take charge against institutions that practices abusive, deceitful acts or violate the federal law with some type of illegal actions. In this case, the Bureau took action against NTSLT and enforced the law. They require trust organizations to conduct an audit of over 800.000 private student loans that they were directly or indirectly involved in. As a result of final judgment, the National Collegiate Trust should hire an independent agent for auditing. Moreover, they asked to audit all those students’ accounts one by one. After the audit, the Bureau will analyze the cases where student loan trusts do not have documentation. If they find that the student loan accounts are missing official documents, they will force the NCSLT to make any necessary corrections.

In addition, the Bureau has asked student loan trusts to pay back more than 2000 students. The overall amount was mentioned as $ 3.5 million for restitution. This is the first stage of the restitution process. After an independent audit, the student debt accounts that have been cleared will be eliminated from the list. What’s more, they will be added to the restitution list for further repayment. These new enforcement updates help students who were harmed by the actions of NCSLT. Those students who are not satisfied with the results can file a complaint and work with the Bureau to solve their issues.

Bureau made National Collegiate Trusts to:

  • Pay $ 7.8 million in Disgorgement
  • Pay $ 2.5 million in a penalty for civil money penalty

Final Points

It can take considerable time to solve all the issues regarding the National Collegiate Trust. This is mainly due to the number of students who got involved in the case. Though, you can take these new updates and legalities on NCSLT as an opportunity for private student loan borrowers. If you have one, keep in mind that challenging the legal validity of your loan is enough for you to get a complete student loan discharge.