Courts could rule in favor of having these loans dismissed because of faulty record keeping.
Billions of dollars of student loans could be wiped away soon due to bad record keeping, according to the New York Times. Creditors who issued these loans have a legal dispute with the many students who have defaulted on these loans. The problem is the creditors can’t produce critical paperwork showing that they own these loans. If they can’t prove they own the loans many students may not be required to pay them back. Many of these loans were issued by financial institutions like Bank of America and JP Morgan Chase. The National Collegiate Student Loan Trust holds most of these debts. They aggressively go after borrowers who default on their loans. In many cases former students have had their debts wiped away because of errors on loan documents. Government issued loans offer more consumer protection than private loans.
The private student loan debt has risen to over $100 billion dollars and is still growing. Many of us are told to go to college, get an education, and land a good job. The problem is that financially many of the loans are a bad idea for students. A student can be left with thousands of dollars in debt when they finish school. Also, a degree does not guarantee employment. Many people go to college with the false idea that once they get a degree they can get a job or a promotion. Although that may be the case for some career fields, it is not for all. I agree that the education is a good thing but, paying for it can leave many financially enslaved. One thing for sure is that student loan debt is a real problem. So before you sign away your financial future next semester, think about how that loan will affect you when you graduate.