Student Loan Assistance Trumps 401ks for Many Employees

Robyn Ryan
July 19, 2017

Lawyers say that since the loans generally passed through many hands before reaching National Collegiate, the paperwork involved is so shoddy that it could affect most of the $5 billion of its debt that is in default.

Judges have recently thrown out lawsuits brought by the trusts in New Hampshire, Ohio and Texas. Due to steep interest rates on private loans, borrowers can often end up paying hundreds, and in some cases thousands, of dollars in monthly payments. If it's a loan we're owed fairly, we want to collect. There have already been 800 collection cases in 2017, and more than 10,000 lawsuits in the past five years.

The National Collegiate Student Loan Trusts, one of the largest owners of private student loans in the US, has sought to collect from borrowers only to have cases dismissed due to lack of proper documentation, the New York Times reports.

The loans that may be forgiven add up to a whopping $5 billion, at least.

The loans held by National Collegiate were originally made by banks and then sold to investors, but ownership records were lost in the process.

But at issue is the group's ability to show paperwork proving that it owns the loans in question. At least $5 billion in loans is now being disputed in court, as private creditors, who have pursued lawsuits against against student loan borrowers that have failed to meet their payments, have struggled to produce paperwork that prove who owns the loans. Of the almost 50% of respondents who reported having a 401 (k), almost one-quarter said they would prefer student loan assistance over their 401 (k) plan.

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