As Paperwork Goes Missing, Private Student Loan Debts May Be Wiped Away
He said he was appalled by National Collegiate’s collection lawsuits and wanted them to stop,
but an internal struggle between Vantage Capital and others involved in operating the trusts has prevented him from ordering a halt, he said
“We don’t like what’s going on,” Mr. Uderitz said in a recent interview.
“We don’t want National Collegiate to be the poster boy of bad practices in student loan collections, but we have no ability to affect it except through this litigation,” he said, referring to a lawsuit
that he initiated last year against the trusts’ loan servicer in Delaware’s Chancery Court, a popular battleground for corporate legal fights.
And like those troubled mortgages, private student loans — which come with higher interest rates
and fewer consumer protections than federal loans — are often targeted at the most vulnerable borrowers, like those attending for-profit schools.
But as the debt passed through many hands before landing in National Collegiate’s trusts, critical paperwork documenting the loans’ ownership disappeared, according to documents
that have surfaced in a little-noticed legal battle involving the trusts in state and federal courts in Delaware and Pennsylvania.