Q: How to get a National Collegiate Trust lawsuit dismissed?

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So you’ve been sued by National Collegiate Student Loan Trust. And now you’re wondering:

How do I get a National Collegiate Trust lawsuit dismissed?

At the end of this post, I share 5 common, but killer, defenses used to defend these lawsuits.

TL;DR: NCT may have a hard time finding your student loan paperwork. And even if they can, they may have a hard time getting the admitted. Hire, or at least speak with, a lawyer --- especially if you think the statute of limitations may have passed.

Without further delay...

Who is National Collegiate Trust

National Collegiate Trust isn’t a private student loan lender, a guarantor, or a loan servicer. Instead, it’s a group of trusts. A trust is a type of entity created to hold someone else’s assets.

With NCT, the assets are student loans that were made by banks, including:

  • Bank One
  • Bank of America
  • Charter One Bank
  • GMAC Bank
  • JPMorgan Chase Bank
  • RBS Citizens Bank, and
  • Union Federal Savings Bank.

Most if not all of these student loans were borrowed before 2008.

I use NCT and NCSLT interchangeably throughout this post. They are, however, separate entities. There’s National Collegiate Funding LLC. And then there are the separate trusts.

When they made these loans, the banks didn’t intend to hold on to them forever. Instead, they were looking to sell them to other loan companies quickly.

Enter, First Marblehead Corporation.

To buy the student loans, First Marblehead created:

  • National Collegiate Student Loan Trust 2004-1
  • National Collegiate Student Loan Trust 2004-2
  • National Collegiate Student Loan Trust 2005-1
  • National Collegiate Student Loan Trust 2005-2
  • National Collegiate Student Loan Trust 2005-3
  • National Collegiate Student Loan Trust 2006-1
  • National Collegiate Student Loan Trust 2006-2
  • National Collegiate Student Loan Trust 2006-3
  • National Collegiate Student Loan Trust 2006-4
  • National Collegiate Student Loan Trust 2007-1
  • National Collegiate Student Loan Trust 2007-2
  • National Collegiate Student Loan Trust 2007-3
  • National Collegiate Student Loan Trust 2007-4
You can find more information about the NCT trusts by looking at the documents filed with the SEC.

The student loans were placed into the National Collegiate Student Loan Trusts, which were all registered in Delaware.

From there, investors bought pieces of the trusts in hopes of receiving a huge dividend as borrowers paid off their student loans.

That huge dividend didn’t really come.

Turns out, of the more than $12 billion of student loans that were placed into the trusts, over $5 billion of the student loans are in default.

And once the loans entered default, NCT had to take action to try and get the money from student loan borrowers.

Unlike the Department of Education, NCSLT can’t automatically garnish your wages or take your tax refund when you default on student debt.

Instead, NCSLT has to hire debt collectors and collection agencies to try and encourage you to pay. When that fails, NCT has to sue you, get a judgment, and only then can it get a wage garnishment or levy your bank account.

Basically, NCSLT has to do a lot to try and get you to pay.

Now, before we get into NCSLT lawsuits, let me answer a question you probably have:

How Do I Find Out If My Loans Are Owned by National Collegiate

You probably read in the New York Times that tens of thousands of people may be able to have their student debt cleared because of missing paperwork.

You may have also read another article in the New York Times that explained that NCSLT agreed to set refund $3.5 million to 2 thousand borrowers. The refund was the result of a lawsuit filed by the Consumer Financial Protection Bureau (CFPB) against NCT and Transworld Systems.

Let me explain something to you:

There’s no easy way to find out if your loans are with National Collegiate. There are, however, a few hints.

First, try and recall when you borrowed the private loans. If you borrowed them before 2008, then National Collegiate may have your loans.

Second, using that same memory muscle, try and recall what bank you borrowed the loan from. If it was one of the banks listed above, then that’s another clue.

Third, check your credit report to see if it lists American Education Services or Transworld Systems Inc. AES is the loan servicer that manages National Collegiate’s debts. TSI  handles the debt collection that’s usually involved with National Collegiate’s lawsuits.

If you see either AES or TSI on your report, chances are NCT owns your private student loan.

Consequences of Losing a National Collegiate Student Loan Trust Lawsuit

As you probably know, being sued for a private student loan sucks. First, there’s the embarrassment of having a sheriff or process server knock on your door (or your cosigner’s door) and serve you or a family member with the lawsuit. On top of that private embarrassment, there’s a chance for public embarrassment if the court’s where you live have a system like Missouri’s CaseNet.

Embarrassment aside, there are legal consequences to losing the lawsuit. If National Collegiate wins, whether by default judgment or trial, they’ll have a judgment against you.

With that judgment in hand, National Collegiate may be able to:

  • Garnish your wages
  • Take money out of your bank accounts (i.e., levy); and
  • Place a lien on your home or other property you own in that state.

Basically, they can cause you a lot of financial harm that is hard to get from under unless you can pay a lump sum or try and discharge it in bankruptcy.

Click here to read Can You File Bankruptcy On Student Loans? Yes and Here’s How

Why NCT Lawsuits Are Dismissed

Let me start with this: for cases other than my own, all I can do is guess as to why these cases were dismissed.

In my experience, there are four common reasons NCSLT lawsuits are dismissed.


First, NCT asks the court to dismiss the lawsuit right before trial. Why do they do that? The best reason I can think of is they’re not going to be able to produce a witness that can testify with personal knowledge about the promissory notes and other loan documents.

Remember, they’re not the original lender. That means they have to have someone competent to testify to the records made by the original lender and any other third-parties.

Second, NCT asks the court to dismiss the lawsuit because they can’t find you to serve you. Maybe you’ve moved from the last address they have for you. Or maybe they learned you live out of state, so they dismiss the lawsuit here to try and sue you there. Whatever the reason, if they can’t serve you, they can’t sue.

Just because they dismiss the lawsuit doesn’t mean you don’t owe the private student loan debt. It just means they have to try and find you to sue you.

Finally, NCT lawsuits are dismissed because the statute of limitations has lapsed. Usually, this dismissal occurs when two things are true:

  1. The borrower hired a law firm to look into the collection case against her; and
  2. The collection case was filed in a state with a short statute of limitations for breach of contract period.

An example helps to explain the last point.

In Missouri, it’s rare that a breach of contract of a promissory note case is dismissed because the statute of limitations has lapsed. The SOL for those types of cases is 10 years.

There is no statute of limitations for federal student loans. You will owe those loans until they’re paid off, forgiven, discharged due to a disability or other cancellation, or you die.

Further reading: How to Easily Crush Student Loan Debt: 50 Statute of Limitations [Coming Soon]

NCT Lawsuits Dismissed in St Louis Missouri [2018]

This year, National Collegiate has filed 58 student loan lawsuits in St Louis County. Of those cases, the court dismissed 12 without prejudice. Another 4 ended with a default judgment. And 4 others ended via a consent judgment.

For comparison, in St Charles County, National Collegiate filed 26 lawsuits. Of those 26, the court dismissed 5 lawsuits without prejudice. Another 4 cases had default judgments entered against them, and another 3 were ended by consent judgment.


A word about these cases. First, not one ended in summary judgment. Nor was summary judgment ever filed by either party.

What does that mean? It suggests that these cases typically aren’t litigated much.

Why not? I’m not certain, but I suspect it has something to do with the lawyers for both sides being familiar with another.

In many of the NCSLT cases I handle, I’m typically dealing with the same three law offices: Kramer & Frank, Wetsch Abbott Osborn Van Vliet, and Brumbaugh & Quandahl. I know their arguments and they know the lawsuit defenses I’m going to raise. This familiarity often leads to settlements that both sides find favorable.

Second, one other thing I saw with these cases was the terrible consent judgments people entered into. Basically, a consent judgment is where you and NCT agree you owe the student loan debt and there’s no trial.

Typically, when my clients settle, they settle via a consent judgment that cuts tens of thousands off their student loan debt. Also, they’re allowed to make monthly payments at an interest rate of 0%. In exchange, for that steep discount and favorable interest rate, they agree to make their payments on time.

In many of the cases I mentioned above, the borrowers who consented didn’t get that type of settlement. Instead, they consented to owing the full amount with an interest rate of 9%.

What was common among those borrowers: They didn’t have a student loan lawyer.

That brings me to my next point;

Hiring a Student Loan Lawyer Helps

I get it. Money is tight. And hiring a student loan lawyer can be expensive.

So it makes sense if you’re thinking of representing yourself.

A word of caution: don’t.

The process is complicated. It’s hard enough to figure out what day you have to be at court, which courtroom you need to be in, and who you need to speak with. Add that to trying to understand affirmative defenses you may have and what your settlement options are, and representing yourself seems like an impossible task.

Having said that, if you really want to try and handle the lawsuit on your own, at least sit down with a lawyer beforehand. Many offer free consultations where they can offer you both general information and specific legal advice about dealing with these types of collection lawsuits.

So you know, unlike those attorneys, I charge for consultations. Like you, if I’m working, I want to get paid.

5 Killer Defenses to Get a National Collegiate Trust Lawsuit Dismissed

This list of common defenses to get National Collegiate Student Loan Trust lawsuits dismissed comes from journalist Stacy Cowley with the New York Times:

  1. National Collegiate can’t prove it owns the debt
  2. National Collegiate can’t introduce records of the loan documents into evidence.
  3. The debt is beyond the statute of limitations
  4. National Collegiate isn’t licensed to do business in your state.
  5. National Collegiate failed to timely respond to requests for more information.

In defending my clients, I use the first 2 defenses the most. The last 3 are hardly ever issues in NCT lawsuits here in Missouri.

You can read more about these defenses in Stacy’s article, 5 Flaws That Kill Student Loan Collection Lawsuits.

Final Thoughts

Getting an NCT lawsuit dismissed isn’t particularly difficult. But dealing with being sued in the first place is.

Plus, even if you do get the lawsuit dismissed, that doesn’t necessarily mean you no longer owe the student loan debt. You can be sued at any point NCT can overcome the issues that caused them to dismiss the case in the first place.

Let’s talk if National Collegiate Student Loan Trust filed a lawsuit against you here in Missouri.

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I'm a student loan lawyer that helps people like you with their federal and private student loans wherever they live.

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