Who is the National Collegiate Student Loan Trust and Why Are They Suing Me?
If you're reading this, you have probably received a Summons and Complaint from someone you've never heard of called the "National Collegiate Student Loan Trust 20XX- X". I would bet almost any amount of money that you have never done business with anyone named the "National Collegiate Student Loan Trust".
But I would bet that you had a private student loan. What you're looking at is the result of "securitization" of that loan.
The National Collegiate Student Loan Trusts (each followed by a few numbers in the official name) are a way of consolidating student loan debt into nifty little packages that eventually allow bonds to be sold to investors. That's what "securitization" means. Yes, that's right, your private student loan from Bank of America might have been sold to a trust so other investors could buy bonds.
Why would they do that?
But you might wonder - how would an investor make any money on student loans that haven't been paid?
Simple. They sue you, hope for a default judgment, then garnish your wages. And they do it by the thousands. Anyway, back on point.
The Private Student Loan Process
When you took out a private student loan, you probably talked to one of the big banks:
- JPMorgan Chase Bank, N.A.,
- Bank of America, N.A.,
- RBS Citizens, N.A.
- And many more
Those banks are the Originators of the student loans. Those banks transfer the funds to National Collegiate Funding, LLC, a company whose sole purpose is to deposit private student loans into a trust. National Collegiate Funding, LLC is called the Depositor since they "deposit" the loans into the trusts. Neither the originator nor the Depositor actually collect payments; no, that job is left to the Servicer. If you fall behind on payments, the Servicer ultimately files the lawsuits.
So what does this mean for me?
In order to successfully sue you for a private student loan, the servicer has to prove that:
- You took out a private student loan;
- That the "National Collegiate Student Loan Trust" that is suing you actually owns the loan; and
- That the amount they are saying you owe is actually the amount you owe.
You would think that these companies would have everything together and be able to prove all that stuff easily with documents. You would be wrong. Their documentation is a mess. And if their documentation is a mess, you have a fighting chance of beating them or working out a reasonable settlement.
I defend these cases. I've seen their documents. To say their proof is lacking is a wild understatement. Why just roll over and let them garnish your wages? You don't have to.