From tuition and books to housing, transportation, and food, there's no doubt attending college is expensive. If you're one of the many students that took out private loans to pay for it all—and you're still paying long after you graduated—you might be off the hook for re-paying the rest of that debt.
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There have been numerous court cases filed by loan organizations against students who have fallen behind on payments. Due to mishandling, incorrect, or the outright loss of paperwork, these cases are being dismissed. According to the New York Times review of the court records, these cases are full of erroneous paperwork.
One of the biggest issues with student loans is that many organizations, such as the National Collegiate Student Loan Trusts, have been struggling to verify actual loan possession. They filed a lawsuit last year against a former student and mother of three who graduated from Lehman College in Bronx, New York in 2013. The lawsuit filed against Samantha Watson was filled with flawed documents. According to her lawyer Kevin Thomas, some of the documents even stated that she attended a school she never stepped foot in. Watson made it clear that she will be responsible for any loans she took out, however, the other debts appointed to her from error she will not take accountability for: “I tried to be honest; I said some of these loans I took out, and I’ll be responsible for them, but some I didn’t take.” In the end, the courts dismissed the four lawsuits brought against Watson and cleared her of her $31,000 debt. “It was such a relief; you just feel this whole weight lifted. My mom started to Cry” said Watson.
This has happened in other states as well. How does the paperwork get so jumbled? Through a process called securitization... by the time it reaches the debt collectors vital information is lost. In other cases, the petitioner automatically wins from the defendants not showing up to state their case against the opposing argument. Private student loans often lack flexibility and have high-interest rates, unlike federal student loans which offer options that cater to the student's needs.