Student Loan Debt can follow you for a long time, and since it’s such a prevalent form of debt, it’s come to the attention of the wonderful people who brought you the subprime mortgage crisis and the Recession. Yes, those guys again.

NATIONAL COLLEGIATE STUDENT LOAN TRUST, WHAT YOU NEED TO KNOW

For those on the receiving end of a communication from the National Collegiate Student Loan Trust, there are a few things you need to know. The first thing is that National Collegiate Student Loan Trust is not affiliated with the federal government or any colleges. They are a Delaware-based business with a connection to a First Marblehead, which describes itself as, “… a leading provider of private student loan solutions for lenders, credit unions, and schools.”

First Marblehead boasts on its website of having generated around $16.5 billion in private student loans. National Collegiate Student Loan Trust is the company created in this filing to the SEC to purchase the loans securitized by First Marblehead to the tune of $673.3 million in student debt and an estimated $50 million in accrued interest. That’s right, NCT and all its varied names such as National Collegiate Student Loan Trusts, National Collegiate Master Student Loan Trust, and National Collegiate Trust are essentially a collection agency – and at times will file multiple lawsuits against one debtor over the same loan. And since 2011, they have filed thousands of suits in multiple states against people in default with their private student loans.

What You Can Do

First reactions to receiving a notice can vary between panic and just blowing it off as another scam. These are the things that you absolutely do not want to do. Getting a default judgment entered against you for not responding or appearing means you can be saddled with that debt for up to 20 years in some states. The first thing you should do is contact an attorney before the time to respond runs. Then the attorney will ask for a copy of your original loan documents, if you don’t have them. A number of courts such as the Ohio Supreme Court, have ruled against NCT because in case after case NCT has been unable prove that they even own the specific loan that they’re claiming. Proof, in this case, means documentation that they bought your loan in particular, and not just a tranche of amortized loans with your loan in it. In other cases, when the debtor obtains a lawyer, the NCT withdraws their case before it can reach court.

The Numbers Game

What NCT is doing is trying the Spaghetti Approach – throw a lot of it against the wall and see if it sticks. The Federal Student Aid reminds you that unlike federally generated loans, private student loan companies and their collection arms do not have to negotiate with you, and are not eligible for federal repayment plans. They only care about collecting the money, and know that not every debtor will hire a lawyer who will represent their interests. Federal law enforced by the Fair Trade Commission – including the Fair Debt Collection Practices Act – and similar local laws can also work in your favor.

Getting help from an attorney at Van Horn Law Group can help you in a stressful time, and make sure that the attempted debt collection is valid and fair.