Category Archives: Student Loan

National Collegiate Trust (NCT) Student Loans

New York Attorney General Schneiderman has set

National Collegiate Trust vulture
NCT Vulture

his sights on the NCT (National Collegiate Trust)

vulture.  Can you find it in the picture?

Stacy Cowley in the New York TImes:

National Collegiate’s trusts have aggressively pursued in court borrowers who fall behind on their student loan payments. An article this week in The New York Times drew attention to the trusts’ inability in many of those lawsuits to produce the paperwork needed to prove that the trusts own the debts they seek to collect. Judges around the country have dismissed dozens of cases filed by National Collegiate’s trusts because of flawed or missing paperwork.

My Experience With NCT

I have handled dozens of NCT cases now, with varying results.

One judge denied 9 NCT summary judgment motions in lawsuits against two of my clients, then changed his mind and granted them judgment.

Another Judge in another court granted their motion without even allowing me to depose a witness.

Conversely, NCT unilaterally dismissed one lawsuit before my answer to their motion was due.

And, this month, I got them to dismiss suits for $178,000 against one of my clients, as they could never produce a witness for us to depose about what their “records” mean.

I have settled a bunch of other NCT suits for about 35% of what is, allegedly, owed.

The 800,000 private student loans that National Collegiate owns, totaling more than $12 billion, were originated a decade or more ago by other lenders, then packaged into securities and sold to investors. As the debt changed hands, crucial paperwork documenting the loans’ ownership appears to have been lost, according to court filings in a bitter legal fight among parties involved in operating the trusts.

Default Judgment Business Model

NCT gives its lawyers very little, and its strategy is based on people NOT getting lawyers and fighting the lawsuits.

NCT gets a default judgment if no response is filed, which is true in, my guess, over 90% of the suits they file.

Donald Uderitz, the beneficial owner of National Collegiate’s trusts, said he had just received the subpoena and had not yet reviewed it.

“Right now, all I can say is given the issues we know we are dealing with, I’m not surprised and I don’t expect this to be the last state attorney general to look into this,” Mr. Uderitz said by email.

Mr. Uderitz has said that he has concerns about the trusts’ ownership paperwork and wants the lawsuits against borrowers to stop until he can more thoroughly investigate the collection problems. A continuing legal dispute between his company, the Vantage Capital Group, and others involved in the trusts has prevented him from making any changes to the trusts’ operations, he has said.


It seems NCT is not happy with the other companies that create the records, as I have yet to find a real, live NCT employee.

Do not make the mistake of not responding to an NCT, or any other lawsuit.

The Brunner Test

The Brunner test is the big hurdle student loan borrowers must get over to discharge student loan debt in bankruptcy. What Is The Brunner Test? The Brunner case is the bane of consumer bankruptcy lawyers trying to get their client’s student loan debt discharged in bankruptcy. Continue Reading

Student Loan News

I long for the day when I can lead with some good Student Loan News.  Today is not that day. The Seattle Times editorialized on a couple of my recurrent themes. Students from middle-class families are forced to depend too heavily on student loans to pay for college. In Washington, about six out 10 students… Continue Reading

Student Loan Seminar

I was privileged to be part of a panel on student loan issues at the American Bankruptcy Institute seminar last weekend. Student Loan Bankruptcy Law Even though bankruptcy law is federal law, it is not the same everywhere. Federal courts are divided into Circuits.  I am in the 6th, Michigan, which also includes Ohio, Kentucky… Continue Reading

Student Loan Borrowers

Most of the time I rant on this blog about student loan servicers, or lenders, including the government. So today, let’s look at student loan borrowers. America’s college grads have earned an “F” in understanding their student loans. What Do Student Loan Borrowers Think? Paul Bedard of the Washington Examiner reports the findings of a… Continue Reading

Student Loan Collections

Well, Student Loan Collections are worse – than even I thought! And my opinion of student loan collectors was, is, they are abysmal. Shahien Nasiripour has a great story at the Bloomberg site. The Department of Education has even more ways to screw up. The Education Department, which rewards its (student) loan servicers with more… Continue Reading

What If I Do Not Pay My Student Loans?

One of the strongest indictments against the value of college is the astonishing number of folks who think they will not have to pay their student loans. According to a new survey, almost half of all college students believe they won’t be burdened with repaying student loans after they graduate. Spoiler alert: They will, unless… Continue Reading

Student Loan Crisis Continues

Hey, I would like a new topic, too! Email me if you have something other than student loan crisis that you want me to discuss. How Bad Is The Student Loan Crisis? Catherine Curan at the New York Post writes, it is getting worse at the hands of servicers. Old news, yes, but, it is… Continue Reading

Student Loan Crisis – How Does It Stand?

New presidents mean new policy, for the student loan crisis, that meant re-instating the 16 per cent collection fee on delinquent student loan debt. Although the fee was only stopped by the Obama administration last year, the New York Times bemoans its resurrection. The Education Department’s decision to let guaranty agencies gouge struggling people is… Continue Reading