Welcome to DU!
The truly grassroots left-of-center political community where regular people, not algorithms, drive the discussions and set the standards.
Join the community:
Create a free account
Support DU (and get rid of ads!):
Become a Star Member
Latest Breaking News
General Discussion
The DU Lounge
All Forums
Issue Forums
Culture Forums
Alliance Forums
Region Forums
Support Forums
Help & Search
Student Loan Creditor, Fined for 'False' Lawsuits, Must Halt Collections
Source: New York Times
Student Loan Creditor, Fined for ‘False’ Lawsuits, Must Halt Collections
By STACY COWLEY SEPT. 18, 2017
One of the nation’s largest holders of private student-loan debt must refund millions of dollars to borrowers and temporarily stop many of its collection activities, under a settlement with federal regulators announced on Monday.
The creditor, the National Collegiate Student Loan Trusts, holds $12 billion in student loans that were originally made by banks. In Monday’s settlement with the Consumer Financial Protection Bureau, the trusts agreed to pay nearly $19 million in penalties and borrower refunds — and could be on the hook for millions in additional payments and forgiven loans. A debt collector that National Collegiate hired, Transworld Systems, will pay an additional $2.5 million.
The trusts “sued consumers for student loans they couldn’t prove were owed and filed false and misleading affidavits in courts across the country,” said Richard Cordray, the consumer bureau’s director.
As part of the $19 million pact, National Collegiate agreed to set aside $3.5 million for refunds to 2,000 borrowers. Those borrowers had made payments after being sued over loans that were legally uncollectable, either because the statute of limitations had passed or because National Collegiate lacked the documentation needed to collect the debts in court.
-snip-
By STACY COWLEY SEPT. 18, 2017
One of the nation’s largest holders of private student-loan debt must refund millions of dollars to borrowers and temporarily stop many of its collection activities, under a settlement with federal regulators announced on Monday.
The creditor, the National Collegiate Student Loan Trusts, holds $12 billion in student loans that were originally made by banks. In Monday’s settlement with the Consumer Financial Protection Bureau, the trusts agreed to pay nearly $19 million in penalties and borrower refunds — and could be on the hook for millions in additional payments and forgiven loans. A debt collector that National Collegiate hired, Transworld Systems, will pay an additional $2.5 million.
The trusts “sued consumers for student loans they couldn’t prove were owed and filed false and misleading affidavits in courts across the country,” said Richard Cordray, the consumer bureau’s director.
As part of the $19 million pact, National Collegiate agreed to set aside $3.5 million for refunds to 2,000 borrowers. Those borrowers had made payments after being sued over loans that were legally uncollectable, either because the statute of limitations had passed or because National Collegiate lacked the documentation needed to collect the debts in court.
-snip-
Read more: https://www.nytimes.com/2017/09/18/business/dealbook/student-loan-national-collegiate-trusts.html
