National Collegiate Trust Sued You?

Who Is National Collegiate Trust?

National Collegiate Trust is an entity that files student loan lawsuits against borrowers.  They sue on private student loans and not federal student loans. They file collection lawsuits in state District or County Court.

National Collegiate Trust is not your original lender or even your guarantor of your student loan.  They are an entity that allegedly owns your loan through a series of trusts that were sold as investments.

When they file a lawsuit against you they are required to prove that they own the debt and that you are obligated to pay the private student loan.     Getting a lawsuit from NCT may only be the tip of the iceberg because they may be holding other student loans that you defaulted on but they only sued you on one of them.

Is My Loan with National Collegiate?

A large majority of the students attending college today have at least one student loan. A huge percentage of these loans originate from the U. S. Department of Education, the government agency that administers federal student loans. However, many students are turning to private student loan companies to finance their college education because federal funds can be limited and difficult to obtain for some students.

Private Student Loans vs. Federal Student Loans

Most individuals who are contemplating attending college are familiar with the financial aid process. Your college’s financial aid office will typically include student loans, in addition to grants and scholarships, as part of the financial aid package. Federal student loans are funded by the government while private student loans are funded by a school, bank, credit union, or state agency. There are several differences between federal student loans and private student loans.

So Who is National Collegiate Student Loan Trust, LLC?

National Collegiate Student Loan Trust, LLC is a Delaware trust but is not a private student loan lender, guarantor, or loan servicer. It is a trust where private student loan companies pool thousands of loans for hedging purposes. The trust takes these loans and packages them into various trusts. This is why you will see numbers at the end of various names for National Collegiate Student Loan Trust, LLC. Those numbers (i.e. 2004-2, 2005-3, 2006-3, etc.) refer to the specific trust where your private student loan is located. The company then sells these packages to various investors or uses the trusts to secure other assets. You can see an actual Deposit and Sale Agreement between National Collegiate Student Loan Trust, LLC and National Collegiate Student Loan Trust, LLC 2007-1 here. These agreements are very complicated and complex because they must adhere to the laws governing trusts.

Associated entities for National Collegiate Student Loan Trust, LLC include:

• National Collegiate Student Loan Trust 2004-1
• National Collegiate Student Loan Trust 2004-2
• National Collegiate Student Loan Trust 2005-1
• National Collegiate Student Loan Trust 2005-2
• National Collegiate Student Loan Trust 2005-3
• National Collegiate Student Loan Trust 2006-1
• National Collegiate Student Loan Trust 2006-2
• National Collegiate Student Loan Trust 2006-3
• National Collegiate Student Loan Trust 2007-1
• National Collegiate Student Loan Trust 2007-2
• National Collegiate Student Loan Trust 2007-3
• National Collegiate Funding, LLC
• First Marblehead Data Services
• NCO Financial
• The Education Resource Institute, Inc. (TERI)
• Bank One, N.A.
• J.P. Morgan Chase, N.A.

What effects mot consumers is the fact that National Collegiate Student Loan Trust, LLC is also a delinquent debt purchasing company that is in business to purchase private student loans from originators (i.e. the bank or other lender who issued the loan) for less than is owed on the account. Many banks and other private student loan lenders sell private student loans shortly after the loans are generated and very few lenders try to collect on delinquent loans.

If a borrower defaults on a loan, the lender sells the delinquent loan to companies like National Collegiate Student Loan Trust, LLC for pennies on the dollar. Most borrowers do not realize that their student loans have been transferred to a servicer, another company, or a debt purchasing company until their receive notice to send payments to another address or receive a demand for payment. National Collegiate Student Loan Trust, LLC disputes that it is a debt collector; however, because it purchases delinquent debts to collect those debts, the trust does qualify as a “debt collector” pursuant to the Fair Debt Collection Practices Act (FDCPA) if it actually “owns” the account.

As other debt collectors who purchase delinquent accounts for pennies on the dollar, National Collegiate Student Loan Trust, LLC aggressively pursues consumers through intimidation and harassment to obtain payment from the consumers. This includes filing collection lawsuits threating consumers with judgements, wage garnishments, and bank account levies.

Defending a Lawsuit by National Collegiate Student Loan Trust, LLC

Because private student loans fall within the same category as other consumer debts (i.e. credit card bills, medical bills, car loans, personal loans, etc.), debt collectors who file lawsuits to collect private student loans have the same hurdles to jump over as other delinquent debt collection companies.

For example, National Collegiate Student Loan Trust, LLC must prove that it actually owns the account in order to file a valid collection lawsuit and obtain a judgment against the borrower. An assignment of the debt or purchase agreement for the debt must pre-date the lawsuit. If National Collegiate Student Loan Trust, LLC cannot produce this document, the lawsuit may be dismissed for lack of standing. In some cases, the trust fails to give the proper notice regarding the assignment prior to filing the lawsuit. This is another affirmative defense that a borrower may use to fight the lawsuit by National Collegiate Student Loan Trust, LLC.
Another element is proving that you are legally liable for the debt and you owe the amount being claimed in the complaint. To do this, National Collegiate Student Loan Trust, LLC must provide documentation from the original loan.

You may have additional defenses to a lawsuit by National Collegiate Student Loan Trust, LLC. Our attorneys have extensive experience defending consumers against lawsuits of this type; therefore, we are extremely well-versed in all of the defenses available for defending a student loan lawsuit filed by National Collegiate Trust.

Settlement

Often working out a settlement with National Collegiate Trust is the best option depending on the facts of your case. We will work with you and NCT to obtain the best result possible should you hire us for the flat fee.

The vast majority of collection lawsuits end up with a judgment against the consumer.  This is primarily because the consumer did nothing to protect themselves or they attempted to defend the lawsuit themselves.

Most of our cases are dismissed by the creditor prior to trial or we reach a favorable settlement for our clients depending on the circumstances of their situation.

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