Q: I have been having problems with National Collegiate Trust and a revolving cast of lawyers and debt collectors. I need to move on with my life and not have to deal with this. Can I consolidate and pay off my loans to get them dismissed or negotiate with them to lower the interest that they are claiming? I’ve even been told that my loans are not eligible for consolidation, which sets of my BSometer. All I want is my freedom!
I get this question pretty often, and the short answer is, “Nothing good will happen if you ignore National Collegiate Trust. Possibly something very bad.” If you’ve never heard of NCT, it’s probably because you don’t have a private student loan. These guys are the investment entity that Bloomberg labeled “a lawsuit machine” and “Robosigning 2.0” for their thousands of lawsuits filed against borrowers across the United States. It has everything to do with your private loan and the derivatives market, and the buying, packaging, and selling of these loans to investors. Remember the “London Whale,” the massive losses and public faceplant that JP Morgan Chase took in 2012? The amount of insufficiently covered potential losses on the market makes that whale look like an anemic guppy.
Q: I took out a private student loan to cover a gap between student loans and expenses for my last year of college. It wasn’t a lot and I busted butt to pay off what I could, since it was at a higher interest rate. Then I was in a work-related accident that left me disabled in 2010. I was able to get my federal loans discharged, and I thought that National Collegiate Trust had given up. It’s been hard, waiting through the suit to go through the whole process, living on disability, and I was homeless at one point, but I ended up settling out of court this year.
National Collegiate Trust can best be characterized as a lawsuit machine engaging in some highly shady practices and filing thousands of lawsuits each year against holders of private student loans. That they’ve had a lot of those suits dismissed is no deterrent, they just keep going. If you have a private student loan and have heard from them, it’s pretty easy to panic. They threaten and bluster, trying to get you to rush into giving them money and putting yourself on the hook. Some of their collectors may even violate the FDCPA by threatening you with arrest or other actions.
About Chad Van Horn
Chad T. Van Horn, Esq. is a South Florida business leader and founding partner attorney of Van Horn Law Group, P.A. Through a combination of dedicated philanthropy, spirited entrepreneurship and legal expertise, he applies his resources and network to helping people. Learn more about Chad Van Horn.