Start My Answer

How to Resolve Debt With National Collegiate Trust

Paul Salvatoriello | December 06, 2023

Paul-Salvatoriello
Attorney
Paul Salvatoriello, JD

Paul Salvatoriello is a seasoned litigator with a diverse background in commercial litigation, trial, and appellate law. After receiving his J.D. at Georgetown University Law Center magna cum laude, Paul began his career at the prestigious firm Lowenstein Sandler, delving into a range of complex legal areas including intellectual property, white-collar crime, environmental law, land use, and employment law.

Edited by Hannah Locklear

Hannah Locklear
Editor at SoloSuit
Hannah Locklear, BA

Hannah Locklear is SoloSuit’s Marketing and Impact Manager. With an educational background in Linguistics, Spanish, and International Development from Brigham Young University, Hannah has also worked as a legal support specialist for several years.

Summary: Sued by National Collegiate Trust? This guide will help you figure out what to do next. You can use SoloSuit to win the lawsuit.

It is an understatement to say that we are in challenging economic times, and the issue of student debt is a massive problem for people throughout the United States. In fact, American borrowers owe over $1.4 trillion on student loans, and $100 billion of that is in private student loans that come with very few consumer protections.

One of the nation's largest holders of that private student-loan debt is a company called National Collegiate Trust, and it has a reputation for using aggressive, even unscrupulous, tactics to collect on those private loans.

If you are currently facing or think you may soon be facing a collection action initiated by National Collegiate Trust, then you may feel that you have no leverage. You may feel scared to even respond to correspondence about your student debt, thinking that you are not able to fight back against National Collegiate's strong-arm collection tactics.

Think again. You are not powerless. You can fight back.

In this article, we are going to tell you all about what National Collegiate Trust is; about the mistakes that the company has made recently; and, most importantly, how you can beat National Collegiate Trust in court. If, after reading this article, you have more questions about how you can fight back against National Collegiate Trust, or any debt collector, we welcome you to contact us at solosuit.com. We are here to help those with debt stand up against debt collectors.

What Is National Collegiate Trust?

Generally speaking, National Collegiate Trust is an entity that holds private student-loan debt, and then packages the debt into securities that investors can buy.

Investors make money on those securities when the student debt is paid off by the student who borrowed the money. So, National Collegiate Trust has a huge incentive to make sure students pay their loans back, which of course leads to its aggressive debt collection practices.

Why is National Collegiate Involved in My Student Loans in the First Place?

If you wonder why National Collegiate Trust is sending you correspondence when you initially got your student loan through another lender, don't worry, you are not alone. National Collegiate Trust does not provide student loans, it just buys them from other lenders after the loan is given out. Here is how the process typically works.

When you first take out a private student loan, you do so through what is called a loan originator. That could be a bank like JPMorgan Chase, Charter One, or Bank of America. Then, once the originator lends you the money, it will sell the loan to a depositor. While the mechanics are complicated, National Collegiate Trust is essentially a depositor of private student loans.

In order to get the loan paid back by students who have graduated, depositors like National Collegiate will engage servicers who send billing statements so that students can make their loan payments. Normally, the servicer's name, not the depositor's name, is on the bill. The depositor, however, still is the owner of your private student loan.

If you fail to pay your private student loan back, it is the depositor who hires the debt collectors to demand payment. National Collegiate Trust is one of the biggest depositors of private student loans in the country. So, if you are receiving collection demands or you received a lawsuit in connection with your private student loan, then you will likely see National Collegiate Trust as the entity trying to collect.

(Need help managing your finances? Check out these resources.)

National Collegiate Complaints

A little over two years ago, National Collegiate Trust found itself in deep legal trouble of its own for forcefully going after borrowers in connection with loans that were legally uncollectable. Specifically, federal regulators from the Consumer Financial Protection Bureau (CFPB) went after National Collegiate Trust in 2017 after finding that National Collegiate was suing student loan borrowers for

  • Loans that National Collegiate could not prove it owned, or
  • Loans in which the statute of limitations (i.e., the deadline for collecting on a loan) had passed.

(Need more info on statutes of limitations? Read our 50-state guide. )

Because of its actions, National Collegiate Trust was forced to pay over $19 million in penalties and had to agree to set aside $3.5 million for refunds to 2,000 student loan borrowers.

National Collegiate Trust's legal problems show you how to resolve debt with them

What is most helpful about the CFPB's enforcement action is that it reveals precisely how student loan borrowers can fight back against National Collegiate Trust and other aggressive loan holders. In short, it gives you a roadmap on how to resolve a debt with National Collegiate Trust in court.

First, in order for National Collegiate Trust to win a debt collection lawsuit against you, it must prove that it, in fact, owns your student loan. The proof must come in the form of documentation showing that National Collegiate bought the loan from the originator and currently holds it. As the CFPB has demonstrated, National Collegiate Trust has some difficulty with keeping its records in order.

Second, in order for National Collegiate to win a debt collection lawsuit, it must prove that it attempted to collect the loan during the time allowed by law. Each state has what is called a “statute of limitations,” which essentially gives a certain length of time for someone to collect on a debt. For example, if your state's statute of limitations is five years, then National Collegiate cannot legally try to collect on your loan if it is more than five years overdue.

What does that mean for you when you receive a collection lawsuit from National Collegiate Trust? It means that you should stand up for yourself against the lawsuit and force National Collegiate to prove its case. To do that, you need to do the following:

  1. Upon receipt of a lawsuit in the mail, respond right away by filing an Answer. You can get help with filing an Answer in your home state by going to solosuit.com. In fact, SoloSuit makes it easy to file an Answer to a collection lawsuit in any jurisdiction.
  2. In the lawsuit, you should demand that National Collegiate Trust prove, with documentation, that it actually owns your particular student loan.
  3. Assert the statute of limitations as a defense when you file your Answer. It is highly likely that the statute of limitations will have run out with regard to your student loan.

What is most advantageous about confronting National Collegiate Trust, rather than trying to hide from their collection efforts, is that you have a good chance of getting your entire student loan debt dismissed. You do so either because National Collegiate Trust will be unable to come up with the documentation to prove ownership of your loan, or because the statute of limitations period has passed.

It is well worth the effort to fight back because having the debt dismissed entirely will do wonders for your credit rating, and for your peace of mind.

(Why do debt collectors block their phone numbers?)

Get SoloSuit to Help You Fight Back Against National Collegiate Trust.

SoloSuit makes it easy to respond to a debt collection lawsuit. SoloSuit is a step-by-step web-app that will ask you all the necessary questions to complete your answer to a complaint. When finished, you can either print the completed forms and mail in the hard copies to the courts. Or, even better, you can pay SoloSuit a small fee to file it for you, and also have an attorney review the document.

Respond with SoloSuit

"First time getting sued by a debt collector and I was searching all over YouTube and ran across SoloSuit, so I decided to buy their services with their attorney reviewed documentation which cost extra but it was well worth it! SoloSuit sent the documentation to the parties and to the court which saved me time from having to go to court and in a few weeks the case got dismissed!" – James


Start My Answer


>>Read the FastCompany article: Debt Lawsuits Are Complicated: This Website Makes Them Simpler To Navigate

>>Read the NPR story on SoloSuit: A Student Solution To Give Utah Debtors A Fighting Chance

Conclusion

National Collegiate Trust does not hold all the cards, even if they try to sue you in court for payment of student loan debt. You can fight back. With the help of SoloSuit, you can easily respond to a collection lawsuit. Given National Collegiate Trust's track record of poor record keeping, you may have a good chance of winning your case in the end. Get started at solosuit.com today.

How to Answer a Summons for debt collection in all 50 states

Here's a list of guides on how to respond to a debt collection lawsuit in each state:

The Ultimate 50 State Guide

Guides on how to resolve debt with every debt collector

Are you being sued by a debt collector? We’re making guides on how to resolve debt with each one.

Resolve your debt with your creditor

Some creditors, banks, and lenders have an internal collections department. If they come after you for a debt, Solosuit can still help you respond and resolve the debt. Here’s a list of guides on how to resolve debt with different creditors.

Settle your medical debt

Having a health challenge is stressful, but dealing medical debt on top of it is overwhelming. Here are some resources on how to manage medical debt.

Guides on arbitration

If the thought of going to court stresses you out, you’re not alone. Many Americans who are sued for credit card debt utilize a Motion to Compel Arbitration to push their case out of court and into arbitration.

Below are some resources on how to use an arbitration clause to your advantage and win a debt lawsuit.

Stop calls from debt collectors

Do you keep getting calls from an unknown number, only to realize that it’s a debt collector on the other line? If you’ve been called by any of the following numbers, chances are you have collectors coming after you, and we’ll tell you how to stop them.

Federal debt collection laws can protect you

Knowing your rights makes it easier to stand up for your rights. Below, we’ve compiled all our articles on federal debt collection laws that protect you from unfair practices.

Get debt relief in your state

We’ve created a specialized guide on how to find debt relief in all 50 states, complete with steps to take to find relief, state-specific resources, and more.

Debt collection laws in all 50 states

Debt collection laws vary by state, so we have compiled a guide to each state’s debt collection laws to make it easier for you to stand up for your rights—no matter where you live.

Statute of limitations on debt state guides

Like all debt collection laws, the statute of limitations on debt varies by state. So, we wrote a guide on each state’s statutes. Check it out below.

Statute of Limitations on Debt Collection by State (Best Guide)

Check the status of your court case

Don’t have time to go to your local courthouse to check the status of your case? We’ve created a guide on how to check the status of your case in every state, complete with online search tools and court directories.

How to stop wage garnishment in your state

Forgot to respond to your debt lawsuit? The judge may have ordered a default judgment against you, and with a default judgment, debt collectors can garnish your wages. Here are our guides on how to stop wage garnishment in all 50 states.

How to settle a debt in your state

Debt settlement is one of the most effective ways to resolve a debt and save money. We’ve created a guide on how to settle your debt in all 50 states. Find out how to settle in your state with a simple click and explore other debt settlement resources below.

How to settle with every debt collector

Not sure how to negotiate a debt settlement with a debt collector? We are creating guides to help you know how to start the settlement conversation and increase your chances of coming to an agreement with every debt collector.

Other debt settlement resources

Personal loan and debt relief reviews

We give a factual review of the following debt consolidation, debt settlement, and loan organizations and companies to help you make an informed decision before you take on a debt.

Civil law legal definitions

You can represent yourself in court. Save yourself the time and cost of finding an attorney, and use the following resources to understand legal definitions better and how they may apply to your case.

Get answers to these FAQs on debt collection

How-to debt guides

Learn more with these additional debt resources