Higher education is an investment in one’s future; and it can be expensive. Student loans fall into two categories, federal loans and private loans.
Federal Student Loan Include:
- Direct Loans, where the U.S. Department of Education is the lender;
- Federal Family Education Loans (FFEL), where private lenders make loans backed by the federal government; and
- Federal Perkins Loans.
To learn more about federal government loans, visit www.StudentAid.gov.
Private Student Loans
Private banks may offer loans and other forms of financial assistance for the purpose of funding education expenses. Private loans tend to have higher fees and interest rates than federal government loans. Private loans also do not offer the opportunities for cancellation or loan forgiveness that are available on many federal loan programs. So, it makes good financial sense to exhaust your federal loan options (as well as grants and scholarships) before considering loans from any private lending institutions.
National Collegiate Student Loan Trust
National Collegiate Student Loan Trust has filed a large number of lawsuits against consumers in the Central Florida Area. Many of these lawsuits are defective on their face. No allegations of assignment are alleged in the complaint. Our firm has had success in defending these cases.
National Collegiate Student Loan Trust claims to be a Delaware Trust that is currently pursuing many consumers in the Central Florida area on student loans. In most cases, National Collegiate Student Loan Trust is the holder of a loan but does not have the necessary assignments needed to prosecute the case.
In order to be successful in suing on a promissory note, the plaintiff must be the holder of the note. An assignment of a promissory note, or the right to enforce it, must pre-date the filing of the lawsuit. A plaintiff must have standing to file suit at its inception, and may not remedy this defect by subsequently obtaining standing.
Another common defect in the collection cases filed by National Collegiate Student Loan Trust is the failure to give notice of assignment. Section 559.715 of the Florida Statutes requires that notice of assignment be given prior to the filing of a lawsuit.
Also connected is a Boston-based company called First Marblehead, once one of the biggest securitizers of student loans. However, this entity shows up nowhere in the paperwork sent to consumers. Instead, these student loans have the logo of National Collegiate Student Loan Trust.
Recent years have seen an upheaval in the private student loan marketplace. In 2008, the credit crisis caused lenders to cut back drastically on their private student loan offerings. Then, in 2010, the U.S. government revamped the federal student loan program, eliminating the role of private lenders in providing federally backed education loans to students through the Federal Family Education Loan Program (FFELP).
The result is that while, in 2007, there were more than 80 private financial institutions offering student loan products, by 2008 there were fewer than ten. At the same time, interest rates and fees associated with private student loans became prohibitively high.
National Collegiate Student Loan Trusts, hold $12 billion in student loans that were originally made by banks. In a settlement with the Consumer Financial Protection Bureau, the trusts agreed to pay nearly $19 million in penalties and borrower refunds — and could be on the hook for millions in additional payments and forgiven loans.
The trusts “sued consumers for student loans they couldn’t prove were owed and filed false and misleading affidavits in courts across the country,” said Richard Cordray, the consumer bureau’s director.
As part of the $19 million pact, National Collegiate agreed to set aside $3.5 million for refunds to 2,000 borrowers. Those borrowers had made payments after being sued over loans that were legally uncollectible, either because the statute of limitations had passed or because National Collegiate lacked the documentation needed to collect the debts in court.
Other law firms that represent National Collegiate Student Loan Trust in Central Florida are:
Pollack and Rosen, P.A.
Hayt, Hayt & Landau, P.L.
Weltman, Weinberg & Reis