One Iowa attorney is responsible for hundreds of thousands of dollars in student loan debts getting wiped away due to missing paperwork that proved ownership of student loans, according to WHO TV.
The attorney, Nancy L. Thompson, has represented student debtors in at least 30 separate cases involving one of the nation’s largest owners of private student loans, National Collegiate Student Loan Trusts.
Every single one of Thompson’s cases pertaining to National Collegiate Student Loan Trusts have been thrown out, except for three. Many of Thompson’s clients have come from central Iowa and owed large amounts of student loan debt.
“There are both ownership issues: is this plaintiff the one that owns this debt? And has a right to collect it? And there are issues with respect to being able to say you owe this particular amount of money, because not only has the loan allegedly been sold many times, the servicing of that loan has been transferred over time,” said Thompson in an interview with WhoTV in Iowa.
National Collegiate Student Loan Trusts is at the center of a massive controversy involving missing paperwork, lawsuits, and student loans. National Collegiate is an umbrella name for 15 trusts that hold a combined total of 800,000 private student loans worth $12 billion. $5 billion of that student loan debt is in default.
Those 15 trusts have undertaken a massive effort to track down the student loan borrowers who have fell behind on their loan payments. Throughout the entire U.S., National Collegiate has filed 100,000 lawsuits in the past five years, and at least four new collection cases are brought to court each day.
Many of those lawsuits have been thrown out, as National Collegiate Student Loan Trusts lacks the necessary paperwork to prove who owns the student loan. Many of the loans were taken out over a decade ago before they were packaged together and sold to investors. Couple that fact with the fact that much of the debt has passed through too many hands before reaching National Collegiate, and it seems unlikely any of the debt will be recovered as much of the paperwork has simply disappeared.
Many of National Collegiate’s cases have been thrown out in court and the debt forgiven as the private student loan owner lacks the proper documentation to prove ownership of the loans. The total amount of student loan debt that may be forgiven is $5 billion.
Thompson later went on to say, “They don’t have the correct documentation to be able to show first that they own the loan, and then secondly that they know exactly how much debt is owed.”
You can consider many of Thompson’s student loan borrowing clients that have had their loans forgiven the lucky ones. There are 43.3 million student loan borrowers in the U.S., and the average borrower owes $28,400 in student loans. Additionally, 1.4 million students use private student loans each year. The average private student loan is $10,000.
Author: Mike Brown
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