Category Archives: National Collegiate Trust

Is The Government About To Nail NCT?

NCT (National Collegiate Trusts) is a frequent

NCT in trouble
University of Michigan law school

subject of my student loan blog posts.

What Is NCT again?

NCT is a company, well, 15 separate trusts, that buy (allegedly) private student loans from banks, packages them into trusts

that, well, let me quote from the Bloomberg news site article by Shahien Nasiripour:

The trusts, created more than a decade ago, cumulatively have held well over 874,000 loans made to more than 812,000 people who borrowed money from banks mostly to pay for their higher education, according to filings with the U.S. Securities and Exchange Commission and monthly reports to investors. Those banks sold the loans to a middleman who created the trusts, and the trusts then sold notes promising certain returns to investors ranging from the hedge-fund manager Waterfall Asset Management LLC to the Bill & Melinda Gates Foundation. Monthly payments to investors are backed by borrowers’ monthly payments on their student loans.

Why Is NCT In Trouble?

Because they cannot prove in court that they own the private student loans on which they are suing.

It is a default judgment business model, they sue betting that you, the consumer-borrower, will not answer.

Then they get a judgment and garnish wages and whatever other forms of execution on a judgment that your state allows.

I have lost some cases defending NCT suits, with judges who accepted their insufficient paperwork.

And some have been dismissed, and some settled for less than half the amount sought in the NCT lawsuit.

As the article puts it:

Consumer lawyers say borrowers generally don’t show up in court, leading to default judgments against them that could eventually lead to wage garnishment. But the lawsuits haven’t led to big recoveries for investors. And in recent years, a number of judges around the U.S. have dismissed the trusts’ lawsuits against borrowers or else ruled against their debt collectors, citing sloppy paperwork.

What Is The Government Doing About NCT?

The CPFB (Consumer Protection Finance Bureau) has been investigating, and the article says there is a tentative settlement.

If it requires NCT to prove it owns a loan before trying to collect from the student loan borrower, or co-signer, that would put them out of business, from what I have seen.

What will the settlement do?

If finalized, it would require the payment of “large sums” in restitution to borrowers and civil penalties to the U.S. government, according to a summary of the proposal filed in a separate court case.

Stay tuned!



NCT And Me

Shout out to Susan Tompor of the Detroit Free Press                (click here) for an excellent article on NCT private student loan trusts. With quotes from yours truly. Anyway, the New York Times story I linked to last week is helping publicize the story, that NCT (National Collegiate Trust)… Continue Reading

National Collegiate Trust (NCT) Student Loans

New York Attorney General Schneiderman has set 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… Continue Reading

National Collegiate Trust (NCT) Case Update

Seems I forgot to post the conclusion to one of the NCT private student loan, well, alleged to be so, collection lawsuits that I was defending in state court. NCT filed its motion for summary judgment,meaning that there was no issue of fact, they win, my client owes the money. We responded that NOTHING in all their pages of… Continue Reading

National Collegiate Trust and Wilfred American Educational Corp.

A couple of student loan scams to discuss this week. NCT and robo-signing National Collegiate Trust (NCT) continues to make news on the robo-signing front. NCT even files student loan collection cases when it has no robo-signed documents. Robo-signing came into its own as a term in connection with the mortgage practices so well displayed… Continue Reading

Some NCT Student Loans Ruled Dischargeable

NCT (National Collegiate Trust) does nothing but  buy private student loan debt from banks and – sue or otherwise try to collect. A recent 8th Circuit Court of Appeals case, In Re: Conway, involved both NCT and dischargeability of student loans in bankruptcy. The bankruptcy debtor, Conway, had 15 different student loans, plus some federal student… Continue Reading

NCT Student Loan Lawsuits In Michigan

The cases involving National Collegiate Trust (NCT)  suing my clients are wending their way through the court system. I have had two mediated so far, one a district court student loan case and one in a circuit court. I say NCT, but, there are apparently 24 different trusts that allegedly hold private student loans that… Continue Reading