Private Student Loan Debts May Be Wiped Away As Paperwork Goes Missing

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How many times have we all said that we wish these hack stories and computers glitches would happen to places like Sallie Mae?

Well, girl, your prayers have been answered because according to the NY Times tens of thousands of people who took out private loans to pay for college but have not been able to keep up payments may get their debts wiped away because critical paperwork is missing.”

There is at least $5 billion dollars worth of loans that have been affected and judges have already dismissed lawsuits against former students who owe money because of how flawed the collections cases are.

If you need assistance getting a loan to pay for college fees, you could consider student loans from Sofi.

Read more via NY Times:

Judges have already dismissed dozens of lawsuits against former students, essentially wiping out their debt, because documents proving who owns the loans are missing. A review of court records by The New York Times shows that many other collection cases are deeply flawed, with incomplete ownership records and mass-produced documentation.

Some of the problems playing out now in the $108 billion private student loan market are reminiscent of those that arose from the subprime mortgage crisis a decade ago, when billions of dollars in subprime mortgage loans were ruled uncollectible by courts because of missing or fake documentation. And like those troubled mortgages, private student loans — which come with higher interest rates and fewer consumer protections than federal loans — are often targeted at the most vulnerable borrowers, like those attending for-profit schools.

At the center of the storm is one of the nation’s largest owners of private student loans, the National Collegiate Student Loan Trusts. It is struggling to prove in court that it has the legal paperwork showing ownership of its loans, which were originally made by banks and then sold to investors. National Collegiate’s lawyers warned in a recent legal filing, “As news of the servicing issues and the trusts’ inability to produce the documents needed to foreclose on loans spreads, the likelihood of more defaults rises.”

Won’t he do it!

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