Could missing paperwork eliminate billions of dollars in private student loan debt?
The New York Times reported National Collegiate Student Loan Trusts, the creditor that has pursued lawsuits against student borrowers over the past few years, has had many of those suits thrown out due to missing documents. The Times reported the creditor's cases "are deeply flawed, with incomplete ownership records and mass-produced documentation."
The dismissal of the suits essentially erases the students' debts.
The Times reported: "National Collegiate is an umbrella name for 15 trusts that hold 800,000 private student loans, totaling $12 billion. More than $5 billion of that debt is in default, according to court filings. The trusts aggressively pursue borrowers who fall behind on their bills. Across the country, they have brought at least four new collection cases each day, on average -- more than 800 so far this year -- and tens of thousands of lawsuits in the past five years."