The case concerns the claims purported by a company, called National Collegiate Student Loan Trust. This company states that former students have not paid back their college loans, and the Trust subsequently purchased the accounts from the original lenders, an assortment of banks.
However, Independence Attorney Ken McClain says that the Trust does not have proper documentation, which would prove that the former students owed the debt to the banks. McClain also says that the Trust does not possess the documentation that legally proves they purchased the defaulted accounts from the banks, and therefore cannot legally collect on the defaulted loans, no matter what.
For many former students in Missouri facing financial trouble and inability to repay their loans, this scandal could not have happened at a better time. McClain claims that this company, the Trust, was not playing by the rules in order to recover these disputed debts, and this is turning out in favor of the struggling former students.
McClain also referred to the recent troubles with subprime mortgage loans. There were cases a few years back, where judges ruled in many instances that the loans in question were uncollectable due to missing, or in some cases faked, documentation. He said this seems to be a similar situation, but former students facing lawsuits from this Trust should seek the advice of an attorney to determine their options.
This brings to light a scary situation for many former college students in many other states. If it is so easy for a potentially-illegitimate company to fake paperwork and claim that you owe a debt to them, how can you protect yourself?
Know what you’ve borrowed, and the terms of repayment.
If you went to college, you more than likely had to take out some kind of student loan to be able to afford your classes, books, and other expenses. When you received the documentation for that loan, it would have detailed the terms of repayment, as well as the lender. This lender may have kept contact with you after you graduated or otherwise left college, or not. In either case, you probably had some kind of a grace period after you were no longer taking classes, and after that period, you should have begun making payments on your loans.
In general, if you do not have that paperwork any longer, there may still be ways in which you can track down information on your loans. One way may be to check your credit report. The loans, and the reporting company, will often be listed directly on your report, and a few Google searches later may get you the information you need, about who to contact. Another option may be to contact your former school. They might still have the paperwork in your file, and might be willing to release that information to you so that you can pursue making good on your debts.
However you go about it, know what you owe, and to who you owe it, and no one will be able to take advantage of you by claiming you owe something to them. knowledge, in this case, is power.
We are not financial advisors and therefor are not giving any financial advise. Before implementing any of the tips on this website, please consult with a financial planner to ensure it makes sense for your individual financial situation.