So what is National Collegiate Student Loan Trusts?
Well, the short answer is this:
National Collegiate Student Loans Trusts is:
- A series of trusts.
- They didn’t loan money to private student loan borrowers.
- They were (allegedly) assigned the private student loan.
- They file private student loan lawsuits in state court.
- Their loans are subject to the statute of limitations.
NCT is nothing more than a storage unit for private student loans made by JPMorgan Chase Bank, Charter One Bank, Bank of America, RBS Citizens Bank, and Union Federal Savings Bank.
So how did the student loan debt go from the banks to one of the National Collegiate Trusts?
TL;DR: National Collegiate Student Loan Trusts hold over 800,000 private student loans. They do not own federal student loans. They have accepted student loan debt settlements. Their loans are subject to the statute of limitations. You may be able to get an NCT lawsuit dismissed if they can't produce a legal paper trail of ownership.
What we’ll cover in this post:
- The loans were sold to NCT
- Flowchart showing NCT paper trail
- How to find out if NCT has your loans
- What to do if they have your loans
- NCT loans are subject to the statute of limitations
- National Collegiate Trust contact information
- CFPB Lawsuit
The Banks Sold the Loans Right After They Were Made
Here’s what happened:
Soon after you borrowed the loan, the bank took your loan and bundled it with other private student loans made around the same time.
Once bundled, the bank sold pieces of the pooled loans as asset-backed securities to investors.
Let’s talk about SLABs for a second.
A student loan asset-backed security (SLAB) is an investment that pays based on revenue, i.e., the monthly payments, received from the payments made on the student loans.SLABs are like the mortgage-backed securities discussed in The Big Short
SLABs were super popular in the 2000s. (National Collegiate Trust has over 800,000 private student loans.)
And they remain popular today. According to the CEO of ReliaMax, Mike VanErdewyk, there’s a billion dollars more in demand for SLABs than there are SLABs to sell.
The reason for the demand?
According to VanErdewyk, security.
First, the investor need not buy the entire pool of loans. Instead, they can buy the pieces they want. For instance, they can buy pieces that are filled with prime borrowers (people with great credit scores, good jobs, and stable income) rather than subprime borrowers.
Second, the loans are typically guaranteed. For instance, with the loans made.
Third, student loans are difficult to discharge in bankruptcy. Sure, there’s been changes in the law, especially with the argument that student loans aren’t an educational benefit. But, mostly, undue hardship remains an almost impossible standard to meet.
- National Collegiate Student Loan Trusts & Bankruptcy: We Won Our Appeal
- Private Student Loan Bankruptcy Fairness Act of 2017 [An Explanation]
Okay, back to National Collegiate.
The banks sold the pooled loans to investors who, helped by First Marblehead Corp., transferred the loans to National Collegiate Funding LLC.
From there, the LLC to deposited the loans with the series of trusts.
And that’s how National Collegiate Student Loan Trust came to have your private student loan.
Confused? Use this Flowchart
Is your head spinning right now?
If so, you’re not alone.
Use this flowchart to see the connection between your private loans and National Collegiate.
- Originators. These are the banks. They are the entities that loaned the money.
- Depositor. National Collegiate Funding LLC.
- Trust. The series of trusts the loans were deposited into.
- Investors. The persons and companies that bought the SLABs.
- Servicers. The companies that handled the collections of the private loans. The servicers included US Bank, PHEAA, American Education Services, and Transworld Systems Inc.
- Guarantor. This is the company that pays off the loan when a borrower defaults on the loan. For the NCT loans, the guarantor was The Education Resources Institute (TERI).
Who Owns National Collegiate Student Loan Trusts
After much research, I’m still not sure who Owns National Collegiate Student Loan Trusts.
The New York Times has identified Donald Uteritz’s private-equity firm, Vantage Capital Group, as the beneficial owner of the trusts. But all that means is that his company receives any money remaining after holders of the promissory notes are paid.
So who are the noteholders?
As best I can tell, the noteholders appear to be a series of investment funds:
- Waterfall Master Fund, Ltd.
- Waterfall Delta Offshore Master Fund, LP
- Waterfall Sandston Fund, LP
- Baldr Sherwood Fund, Inc
- One William Street Captial Master Fund, Ltd
- OWS ABS Master Fund II, LP
- OWS COF I Master, LP
- OWS Credit Opportunity I, LLC
- OWS Global Fixed Income Fund (USD-Hedged), Ltd
- LibreMax Master Fund, Ltd
- LibreMax MSW Fund, Ltd
- AG Mortgage Value Partners Master Fund, LP
- AG TCDRS, LP
- AG Pisgah, LP
- AG Super RMBS LLC, and
- AG Opportunistic Whole Loan Select
How to Check to See if Your Loans Are With National Collegiate Student Loan Trusts
Now that you know who the National Collegiate Student Loan Trusts are, it’s time to find out if they have your private loans.
The easiest way to do this is to contact AES.
They serviced private student loan debt for National Collegiate. So it stands to reason if you had a loan with NCSLT, AES would have your records.
And if they don’t…
Try contacting Transworld Systems, Inc.
They serve as a debt collector for National Collegiate.
Again, chances are, if you have a loan with NCSLT and haven’t paid on it, the loan went into default and was sent to TSI for debt collections.
And If that doesn’t work…
You can always wait to be contacted by a debt collector like Simm & Associates; Wetsch Abbott; Weltman, Weinberg, & Reis; and Kramer & Frank. Those are a few of the common debt collection law companies and law firms National Collegiate uses.
What to do if NCT has Your Loans
Once you know National Collegiate has your loans, the next thing to know is your options.
Unlike federal student loans, National Collegiate has no right to wage garnishments until it files and wins a collection lawsuit against you.
Further reading: What to do When Sued for Student Loan Debt
What that means is that National Collegiate has no way to force you to pay any amount of money.
The best they can do is file late payments on your credit report and make repeated collection calls.
This inability to force you to pay makes negotiating a settlement with NCT a possibility.
Check National Collegiate Trust Statute of Limitations
A big difference between federal loans and private loans is that federal loans do not have a statute of limitations.
The U.S. Department of Education can collect on its loans until you die.
Private student loans, on the other hand, are subject to statute of limitations.
Having said that, unless you live in a state with a statute of limitations that runs quickly (North Carolina for instance) don’t count on this as a way to dismiss the lawsuit.
- How to Get a National Collegiate Trust Lawsuit Dismissed
- Being Sued for Student Loans: A Step-By-Step Guide (That Works)
National Collegiate Student Loan Trust Address
At some point, you may decide you want to sue National Collegiate Trust. Or maybe you’ll meet with a student loan bankruptcy attorney who thinks you can get rid of the loan.
In either case, when you want to serve legal documents on NCT, consider using this contact information:
National Collegiate Student Loan Trust℅ Wilmington TrustRodney Square North1100 N Market StWilmington De 19890-0001
If you were looking for National Collegiate Student Loan Trusts’ website, stop. As far as I know, they don’t have one. The closest you’ll get is the website for NCT’s owner trustee, Wilmington Trust.
While we’re on the topic of lawsuits, let me not forget this lawsuit filed against NCT...
The CFPB Lawsuit & National Collegiate
In September 2017, the Consumer Financial Protection Bureau filed a lawsuit in the Delaware district court against NCT and Transworld Systems for illegal student loan debt collection lawsuits.
The CFPB argued:
- National Collegiate sued private student loan borrowers without having the right legal documents (chain of assignment/paper trail, promissory note, etc.) to support their claims; and
- The affidavits filed with the lawsuits were invalid because they weren’t signed by someone with personal knowledge of the borrower’s or cosigner's account records.
A proposed final judgment was agreed to by the parties. That agreement required an audit of the 800,000 student loans in NCT’s portfolio and restitution to over 2 thousand private student loan borrowers.
It’s my understanding that the judgment isn’t final.
Last fall, the proposed judgment was being challenged by other entities that were parties to the underlying securitization transactions involving National Collegiate. They argued that the judgment, if entered, altered their rights they relied upon when they entered into the transaction.
The district court agreed and allowed them to intervene in the lawsuit.
My guess is you came here because you have a private loan with National Collegiate Trust and you wanted to know more about them and what your options are.
I hope this post helped answer those questions.
Let’s talk if you’d like help negotiating a settlement or if National Collegiate has sued you for student debt here in Missouri.