At least $5 billion in private troubled student loans may be dismissed because paperwork that proves loan ownership is missing.
A group of creditors may not be able to collect on the loans even after taking student borrowers to court because of the missing paperwork, The New York Times reported.
Judges have already dismissed dozens of lawsuits against former students, essentially eliminating their debts because of the paperwork problem, according to The Times. The missing documentation may mean tens of thousands could be off the hook for paying back loans, according to The Times report.
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In a review of court records, The Times found several similar cases contain incomplete ownership records as well.
The National Collegiate Student Loan Trusts, one of the country’s biggest owners of private student loans, is reportedly at the center of the lawsuits.
The ongoing student loan issues show echoes of the sub-prime mortgage crisis 10 years ago when billions in loans were wiped away because of missing or false documentation.
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