Have you been served with a summons by the ultra-aggressive private student loan lender known as the National Collegiate Trust? Countless students and graduates are being sued by National Collegiate Trust (NCT), and their parent companies Turnstile Capital Management and Goal Structured Solutions, for not meeting their student loan obligations. Relief options have been few and far between for private student loan borrowers; with various measures being taken by institutions such as the National Collegiate Trust – with lawsuits being one of the most common.
What Does it Mean to be Sued by the National Collegiate Trust, and Why is it Difficult to Beat Them?
Settlement prior to litigation is the only tried and true way to prevent a lawsuit on a defaulted National Collegiate Trust loan – although once a lawsuit does happen, National Collegiate Trust is being beaten in court with some regularity. This largely depends on the experience and skill level of the consumer defense attorney representing the borrower, however. In fact, policy makers and journalists have even gone as far as labeling the National Collegiate Trust as a “lawsuit machine” – sound extreme? It’s not. Borrowers can expect a lawsuit within 6-12 months of defaulting on their National Collegiate Trust private student loans in many cases. The National Collegiate Trust is notoriously litigious and they file lawsuits as a regular part of their business model. It only gets worse once you realize that most people are typically underrepresented in trial, allowing the National Collegiate Trust to easily win the case in court. When borrowers don’t even show up to defend, the National Collegiate Trust wins a default judgment which opens the door to wage garnishments, liens, and bank account levies. What Exactly is the National Collegiate Trust and Why is it So Difficult to Beat Them? The National Collegiate Trust is one of the strongest private lenders – consisting of an actual trust (or set of trusts) that is owned by a company called Goal Structured Solutions, which is also closely affiliated with Turnstile Capital Management. So what does this mean? To put it simply, the National Collegiate Trust has been operating for years out of the limelight – various students and recent graduates have attempted to contact the National Collegiate Trust by looking for a phone number online, but there isn’t one – considering it’s an actual trust fund owned by GSL. While there is a phone number for borrowers to call GSL, most people don’t know that National Collegiate Trust is a literal trust fund owned by GSL. To make matters more confusing, National Collegiate Trust is one of the largest debt buyers in the private student loan industry (where debt buying is not as common as in other industries such as credit card debt); so National Collegiate Trust is usually never the original private lender a borrower signed up with. Rather, the National Collegiate Trust purchases loan portfolios from small and large private lenders who have rapidly exited the private loan business during and after the Recession. And to add a final layer of confusion, most National Collegiate Trust accounts are serviced by AES when they are current. It’s apparent that going up against the National Collegiate Trust in court can be a daunting task. To make matters worse, the consequences of losing a case to the National Collegiate Trust are extreme; ranging from default judgments, wage garnishments, or heavy court ordered payments. Therefore, you have to do everything in your power to ensure you successfully defend yourself in court – this means hiring an experienced student loan attorney to defend you if a lawsuit is filed. If a lawsuit hasn’t been filed, it’s a good idea to reach out to an experienced private student loan negotiator to reach a settlement at a significant discount, without having to go through the legal hassle of a court battle. But with so little options in your corner – how can you level the playing field and come out victorious? There’s not a lot of defenses that have worked in the past, but there is one legal defense that has successfully defeated the National Collegiate Trust (disclaimer – I am not a lawyer and do not provide legal advice, and this article is inspired by another article by an attorney who has beaten National Collegiate Trust in court). We begin by analyzing the increasing number of lawsuits characterizing the private loan industry, the usual court process, and what defense you can use to put a halt to the powers of the National Collegiate Trust. The Current State of the Private Loan Industry When it comes to federal student loans lawsuits are quite rare, but does this hold true for private student loans? Federal loans have extensive collection measures which mean they don’t have to take someone to court to collect through wage garnishment or even tax return or SSI offset. Judging by the actions taken by large institutions such as the National Collegiate Trust, it’s apparent that the story is much different. When it comes to the private loan industry, lawsuits are very common. Why Are Lawsuits So Common for Private Loans? Unlike federal loans, lawsuits are far more common for private loans because they’re the main source of collection for private lenders. Whereas federal loans come equipped with many tools of collection that can be administered without the courts – private lenders don’t have much of a choice and have to solely rely on lawsuits to collect. With that said, if you’ve been served a lawsuit – the worst thing you can do is ignore it. This may prove to be common sense, but a lot of borrowers make the fatal mistake of simply discarding the lawsuit paperwork – this is clearly the wrong approach because it will almost always result in a default judgment followed by potential wage garnishment or other forced collection activity. So if you shouldn’t ignore the lawsuit, what should you do? You need to defend yourself with the help of a licensed attorney. There are quite a few defenses attorneys for students and graduates raise in court – the most common of which are included below: –The defendant paid the outstanding balance but it wasn’t recorded by the lender –The defendant does not owe the outstanding debt –The private lender failed to calculate the correct amount outstanding –The private lender is demanding more than the defendant initially agreed to pay –The defendant never agreed to pay the outstanding debt –The private lender waited too long to file a lawsuit Although the above defenses may work in certain cases, the reality of the situation is they haven’t consistently worked against the NCT. So if the above defenses aren’t fit for success – what’s the best defense to put forth in court? According to lawyers who have successfully defended their clients against the NCT – the most effective defense is that of standing. What Does This Mean? And How Can You Use it to Beat the National Collegiate Trust? In order to successfully use this defense, you must first realize that the National Collegiate Trust actually may not have a contractual relationship with you – you can use this fact to your advantage by raising the question of whether or not the National Collegiate Trust actually owns your particular loan and whether they have all the required SEC documentation to prove this. While it is rather easy for a lender like NCT to meet the FDCPA Validation requirements, the more complex SEC forms required by a good consumer defense attorney during litigation can prove more problematic for them to produce. So if you’ve been served a lawsuit from the NCT – the number one thing you should do is hire an experienced lawyer. If you’re going to seek representation, you must make sure your lawyer is experienced with cases involving the NCT. It’s true that going to court against the NCT can be frightening, especially since you don’t have many options in your corner, but if you keep the above points in mind – you can greatly level the playing field and come out victorious against the NCT in court.
What if you’ve been sued by National Collegiate Trust, and received a judgment?
If you’ve already received a judgment (lost a lawsuit), it is likely that it can be settled by an experienced NCT debt negotiator without the help of an attorney. If you have an NCT account that is not yet in litigation, it can also be settled by an experienced debt negotiator.
Many times, a lawsuit with the NCT is filed with the county or district court.
They sue student loan borrowers and cosigners who have borrowed private loans, and not federal loans.
https://www.westonlegal.com/debt-lawsuits/national-collegiate-trust-lawsuit/
Sources indicate that around 8-percent of student loan debt is comprised of private student loans; while more than 90-percent of loans are considered to be federal loans. The average amount of student loan debt is highest among those who attended medical or law school, dental school or had a loan for pharmacy school. An estimated 43 million individuals within the country are said to possess student loan debt. Are you one of them? How long have you been struggling to pay off your private student loans?
https://www.nerdwallet.com/article/loans/student-loans/student-loan-debt
https://www.fool.com/student-loans/student-loan-debt-statistics/
Check out our homepage slideshow for many of the NCT settlements I’ve negotiated in the past. Enjoyed this article? Check out more of our articles on our blog, from articles on settling private student loan debt to negotiating private student loan settlements to navient loan settlements – we cover everything you need to know to successfully fulfill pay off your private student loans for the least amount possible.National Collegiate Trust
The short answer is yes. Although very few experts have direct knowledge or experience in working with Heal loan borrowers, Heal loans can be settled! Read on to find out how and what to expect with a Heal loan settlement.
First, a little about Health Education Assistance Loans:
HEAL loan options were originally created for health professionals to further their education in medical school. These are a unique subset of federal student loans created in the late 70s and discontinued in the late 90s.
Because this program was created prior to the Department of Education, they are not as streamlined, even though the Department of Education eventually took it over. This type of student loan debt was created by private lenders and guaranteed by the federal government; so in this way they are similar to the FFELP program (which has also been discontinued).
Unlike FFELP federal loans though, Heal Loan accounts can be resolved for significant discounts. This is a process that is unknown for the vast majority of debt experts, and forget about the average collegiate debt relief company having any knowledge of this heal loan program whatsoever. These programs are not eligible for the normal Income-Driven repayment plans, and even though the Department of Education has taken over these accounts, they do not offer the same relief as they do for other federal student aid borrowers.
As an expert debt negotiator who has settled millions, I’ve talked to thousands and thousands of borrowers over the last decade. One of my most interesting conversations was with a doctor who had been able to settle for a vast discount – much, much lower than federal balances settle for and even lower than the normal range for private heal loan settlements (read on for the exact percentage of her settlement). This really piqued my interest at the time, and I began researching further about the Heal loan program.
Next, the bad news: HEAL accounts have indefinite statutes of limitation and collection
Although the program was discontinued, like all federally guaranteed debts, there are no statutes of limitation and the federal government will use aggressive collection tactics to try to collect over an indefinite period of time. The important thing to keep in mind is: this will be an ongoing problem during a medical professional’s career, and even during retirement. They simply do not go away.
What kind of collection activities can HEAL borrowers face?
- Assignment to a collection agency
- Lawsuit and judgment in federal court
- Offset of tax refund
- Prevention of Medicare acceptance at the medical professional’s practice
- Publication on the infamous HEAL student loan default list
So how do you resolve them and prevent further negative consequences?
Unless you’re actively facing litigation on these accounts, you don’t need a student loan attorney for settlement. What you do need is a world class student loan negotiator who has experience with a wide variety of settlement scenarios to help you negotiate the lowest possible settlement, and to make sure the negotiated agreement is executed properly.
There are some types of accounts where it’s possible to try to settle on your own: a small credit card debt with a non-aggressive lender, a past due medical bill, etc. For large heal loan balances, there are high stakes significant consequences if the settlement isn’t executed properly – you need a professional. Along with saving you the time and effort involved, there’s simply no replacement for the level of expertise that a debt expert with millions in loan debt negotiation brings to the table.
It really evens the playing field and saves you the stress of negotiating with a debt collector – and for larger accounts, collection agencies make sure that their pros are the ones involved. A professional collection agent spends at least 8 hours a day, 5 days a week, honing their craft – often for years. Trying to go head to head with someone like that in your first major debt negotiation is a recipe for disaster. Even if debts are reduced enough, the follow-up is often where people get into trouble.
With these types of accounts, the execution followup would include removal from the Heal loan default list, and making sure that there are no further collection activities. If for some reason the debts are still reporting on credit, then it’s important to make sure that is notated correctly as well. However, this is unlikely because even though they have no statutes of limitation, credit reporting timelines dictate that accounts fall off reports after 7 years from the first missed payment.
Are there any other ways to get relief?
Unfortunately, there aren’t many available avenues for loan repayment assistance to really resolve a Heal loan default in it’s current form. Forbearances are generally unavailable, Income-Driven Plans aren’t either. Forget about Rehabilitation. HeaL loan accounts do not qualify for any type of student loan forgiveness or loan forgiveness programs. Bankruptcy is generally not possible and reported to be even more difficult than for normal federal loans, which are notorious for the difficulty of discharging in bankruptcy.
However, it can be possible to go through Direct Consolidation to be come eligible for all of the normal relief options that “normal” federal accounts have. By doing this, they fully converts to Direct Loans and you lose any chance of ever settling it for a fraction of the balance. It would re-report on your credit, and you would have to sign up for a repayment plan (once the pandemic forbearance is over).
Consider carefully before going through Direct Consolidation for a HEAL loan. Student loan settlement at a massive reduction is possible on these loans, and by going through Consolidation, it will make the entire balance plus late fees become the new actively reporting balance on your credit. There is no real chance of federal loan settlement on an account that’s brought current, so this permanently removes that option. For borrowers with smaller balances or those who can’t afford to settle, this could be a good option to get the account current and off the HEAL list and enter into normal student loan repayment.
How to decide: Settlement or Direct Consolidation?
For those with larger balances, evaluate whether you want to begin repaying on the full balance plus late fees instead of potentially reducing it by more than half the balance and moving on with your life. If a larger balance is currently not on your credit and is reported when brought current (which will happen), this can drastically affect your Debt to Income ratio and could have a negative impact on your credit as it will look like a new installment loan, with no previously reported credit history prior to when it is brought current.
However, this does open the door for normal federal loan relief options – and permanently eliminates the option of a drastically reduced balance. A careful evaluation of your current and future financial situation is a good idea when considering these two options. Federal loan settlements are generally only for accounts that have been in default for many years, with the reduction mainly being a removal of late fees and some interest that have accrued after default.
With HeaL loan accounts, the chance for a massive settlement could be a once in a lifetime opportunity.
If you can afford a lump sum payment, you can resolve the HeaL account for far less than the balance instead of creating a new burden by taking it out of default via Direct Consolidation. If you have the settlement money to fund the heal loan debt settlement, the savings are tremendous and unlike anything available for normal federal loan benefits.
I’m here to help:
As one of the top loan negotiators in the US, I will use all of the strategies, experience, relationships, and negotiating tactics that I have developed over a decade long career to settle for as low as possible. And if I’m not successful, you owe me nothing – that’s the beauty of performance based negotiation.
Remember in the beginning of this article when I said to read on to find out the exact percentage of the settled account for the doctor I spoke to?
It was 26%.
The fact that a settlement that low was possible (on a federal debt with no statutes of limitation) absolutely blew my mind.
Click here to request a free evaluation on whether settling your HEAL student loan default is the right move for you, or give me a call right now at 937-50
