If you owe a private student loan to one of the trusts, your options depend on your loan status.
If your NCSLT loans are with AES
American Education Services is the loan servicer for NCSLT loans. It’s responsible for collecting student loan bills, keeping track of whether you pay on time, and explaining your repayment options. You also can ask AES how to qualify for a co-signer release.
If you need a lower student loan payment, consider these strategies:
Ask for a temporary payment decrease. While an income-driven repayment plan isn’t an option for private loans, you may be able to make interest-only payments for a limited time.
Request a forbearance or deferment. Either option can stop payments for a short period of time.
Apply for student loan refinancing. Borrowers with good credit scores and stable income can qualify for a lower interest rate and better repayment terms.
Learn More: AES Student Loan Forgiveness Programs
If your NCSLT loans are in collections
Your loans are moved to a debt collector if you don’t make payments as outlined in your loan’s contract, also known as the promissory note. You’ll need to work with the collection agency to handle the debt following a student loan default.
Your options for recovering from default are limited. Private student loans don’t offer student loan rehabilitation and consolidation. Instead, the collector will typically offer you three options:
Pay the loan balance in full. When student loans default, the full amount owed is due immediately. If you can afford that, you can pay the balance and be done with the debt.
Negotiate a payoff. You may be able to negotiate a student loan settlement for less than you owe, but don’t expect to “pay for deletion”. Most collection agencies are unwilling to remove student loans from a credit report if you pay the debt off.
Make monthly payments. If you can’t afford a settlement, the debt collector may offer to let you make payments towards the balance. Those payments typically won’t help your credit and typically won’t stop a lawsuit. But they can help lower your balance.
Learn More: How to Recover From Private Student Loan Default
If NCSLT is suing you
While the federal government has paused collections during the coronavirus pandemic, the National Collegiate Student Loan Trusts have stayed in court to recover past-due debts, according to the Washington Post.
Before it can win a debt collection lawsuit, NCSLT has to first prove you owe the debt, and it tried to collect the loan before the statute of limitations expired. Here’s what to do if NCSLT is suing you.
Step 1 – Go to court. The summons will have a date for you to attend court. If that date has already passed, contact the clerk and ask the next date the judge hears student loan cases. Show up and let the judge know you’re ready to respond. Also, consider hiring a student loan lawyer to represent you or give you advice about available defenses.
Step 2 – Defend the lawsuit. Start by demanding NCSLT prove it owns your particular student loan. The documentation should include a promissory note with your signature and an affidavit with paperwork showing how your loan was transferred from the original lender to the trust that is suing you. You can also use the statute of limitations as a defense if it’s been years since you’ve made a payment or never paid the loan.
NCSLT loans have a statute of limitations, with lengths varying from state to state. Statute of limitations when collecting a student loan debt refers to how long a creditor has to sue for repayment. If the statute of limitations expires, a creditor can’t sue you. But if it does, you can ask the court to dismiss the lawsuit because the time to sue you has passed. The debt is stale.
But that doesn’t mean your student loans disappear. NCSLT may still try to collect the debt, but it won’t use the court system to do so.
Step 3 – Get a resolution. If the judge doesn’t dismiss the case, try to negotiate a settlement for less than you owe. The settlement can be a lump sum payment, monthly payments, or a combination of the two.
Learn More: How to Defend a Private Student Loan Lawsuit
If NCSLT is garnishing you
NCSLT can garnish your wages only after it sues you and gets a judgment from the court saying you owe it money. The court order allows it to send a garnishment notice to your job directing your employer to send it a portion of your pay. In some states, that order may also allow it to take money from your bank account and put a client on your home.
Your options are limited to stopping a garnishment from NCSLT. You can:
Negotiate a lump-sum settlement. The creditor law firm that sued you may be willing to stop the garnishment if you offer a lump-sum student loan payoff that can be paid right away. Typically, you’ll need to offer at least 40% of the outstanding balance. If you’re not sure who to call, check the garnishment notice sent to your employer. The notice will list the collection agency.
File bankruptcy. Bankruptcy won’t get rid of the loan automatically, but it will stop the garnishment immediately. To wipe out the debt, you’ll need to file a lawsuit in your bankruptcy case called an adversary proceeding. Not every lawyer handles these types of cases. You may need to hire a student loan bankruptcy lawyer. You can click here to learn how to prove undue hardship for student loans.
File a motion to set aside the judgment. NCSLT wins many of the lawsuits it files because the borrower doesn’t come to court, and it gets a default judgment, according to the New York Times. If you don’t remember being sued, you may be able to ask the judge to get rid of the judgment and allow you to defend yourself. Contact a consumer rights attorney near you for help.