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NextGen Magazine

 
 

Student Loan Payment Company Must Refund $3.5M to 2,000 Customers

By:
Chris Gaetano
Published Date:
Sep 19, 2017
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The Consumer Financial Protection Bureau has ordered National Collegiate Student Loan Trusts to pay $19 million in penalties, including about $3.5 million in refunds to 2,000 customers paid the company after it had illegally sued them, according to CNN Money. The company purchased and securitized student loans from banks between 2001 and 2007 and then initiated more than 94,000 collections lawsuits against defaulted borrowers between 2012 and 2016. In the case of the 2,000 who will be refunded, the trusts did not have the paperwork to prove that the borrower was the one who owned the loan. In other cases, the statute of limitations had expired. CNN Money said more could get relief, as the trusts must now conduct an audit of all 800,000 loans in its portfolio in order to determine if it had the proper paperwork to prove ownership; if it does not have this documentation, the trusts will have to stop collections activity.