• DYE CULIK PC | Consumer Protection Division

NCSLT Loses Lawsuit and Appeal, Can’t Prove it Owns Student Loans, in Case Where Consumer Represente


NCSLT loses Massachusetts student loan case

National Collegiate Student Loan Trust, usually just called  NCSLT, isn’t a one company, but instead a collection of trusts who purchase private student loans originated by more than 50 lenders, including PNC Bank, Citizens Bank, Charter One Bank, Sovereign Bank, HSBC Bank USA, JPMorgan Chase Bank, SunTrust Bank and many others, as a part of a large investment portfolio.

In a recent Massachusetts District Court case, Culik Law represented a consumer who was sued over student loans by two of the NCSLT trusts. NCSLT filed lawsuits seeking over $20,000, and then filed a motion for summary judgment, asking the court to grant judgment without a trial. The consumer filed her own motion, highlighting numerous inconsistencies in the documentation they submitted as evidence to prove its claims.

After a full hearing, the District Court judge ruled that the consumer won. NCSLT was awarded nothing because it did not own her student loans. And, the judge ordered that NCSLT had to pay the consumer’s costs. NCSLT tried to appeal the ruling, but the court dismissed the appeal, as well.

A copy of the judge’s decision against NCSLT is here:

Judgment Against NCSLT

NCSLT then attempted to appeal the decision against it, but its appeal was also dismissed.

This decision echoes recent reporting by national media outlets including the New York Times and Time Magazine, due to their recordkeeping inconsistencies, it often lacks the required documentation to prove that it owns, and has a right to collect on, most student loans it says belong to it. For example, in 2015, one company conducted an emergency audit of NCSLT’s records and found that none of the files reviewed contained enough documentation to show, under the court rules, that they owned the loans.

The Consumer Financial Protection Bureau recently concluded its own extensive investigation into NCSLT’s collection practices and found widespread violations of federal debt-collection regulations, including that they filed lawsuits without the intent or ability to prove the claims if challenged, and filed false or misleading affidavits and testimony in support of those lawsuits.

Nevertheless, courts across Massachusetts (and in many other states) have seen a significant increase in the number of lawsuits they are filing against consumers to collect on defaulted student loans purportedly owned by the various National Collegiate Student Loan Trusts.

If you are having debt-collection issues or are being sued for student loans by a company like NCSLT, give us a call. Culik Law is a consumer protection law firm representing clients in Massachusetts. Our attorneys have handled numerous cases against National Collegiate Student Loan Trusts and many other debt collectors.

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