Student Loans

Are You One of The Borrowers Whose Student Debt Might Be Erased Due To Missing Paperwork?


It’s “Show Me the Note” all over again, but this time, student loans, not mortgages, are the subject of questionable consumer debt collection practices. According to a PHEAA (Pennsylvania Higher Education Assistance Agency) audit, in dozens of suits against student loan borrowers, the suing entities can’t produce paperwork proving it owns the debt, so judges are dismissing the suits. According to Money Magazine, as a result of the inability to show the chain of title of the student loan notes, may be billions of dollars in defaulted private student loan debt may be wiped clean. The New York Times reported the National Collegiate Student Loan Trust is at the center of all the cases it cited. The National Collegiate Student Loan Trusts holds roughly 800,000 private loans, indicating the potential size of the problem.

For many borrowers, the biggest question that arises out of this discovery is: Are your loans affected?

Sorry, the probability of your loan being without the correct chain of title is low, but it may be worth finding out. Loans can be misfiled due to incorrectly typing the name or social security number associated with that loan, and some older notes were hard copies that were misplaced.

Who’s Who:

PHEAA, founded in the 1960s to provide taxpayer-funded grants to needy Pennsylvanians attending colleges and other schools, has grown into one of the nation’s largest student loan servicing providers. PHEAA’s two corporate units process, manage and collect more than $392 billion in student loans, originated by PHEAA and others.

In short, PHEAA is a big student loan servicer. PHEAA collects and applies your loan payments, and pursues past due amounts owed your student loan lender.

Your Bank, such as JP Morgan Chase, Bank of America, N.A., RBS Citizens, N.A. or Union Federal Savings Bank is your lender. The lender may hold the note in its portfolio or can receive money by selling a bundle of loans to an entity such as the National Collegiate Student Loan Trusts.

National Collegiate Student Loan Trusts is investment vehicles, sold on the secondary market. This is important, since as the loans are bundled and sold on the market, the change of ownership must be recorded and tracked, and records must be maintained, if the right to collect is to be established.

So, to know if you are affected, look at the information on your monthly statement, contact The National Student Loan Data System ( The NSLDS is the Department of Education’s central database for student aid. On the NSLDS site, you can find information about what kind of loan you have, Loan amounts, balances, status, and disbursements. Identification information is required to access the database, including a personal identification number (PIN) that you can obtain online. You can also access the database by calling the Federal Student Aid Information Center (below).

So, cross your fingers and check it out!

Need professional help with harassing creditors on your student loans? Talk to a professional who can help with FDCPA violation identifiers and procedures.