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Student Loan Lawsuits

The student loan industry consists of a complex assortment of lenders, servicers and guarantors. The process begins with an original lender that a consumer may have taken the loan out with. Then there is the company that interacts with you and sends you your monthly bills or the servicer. However, often these loans are transferred, sold and assigned to new lenders. They are also frequently securitized into investment vehicles which can play on the open market. Some of these securitized loans are very similar to the mortgage backed securities that were partly to blame for the market crash a few years back. Now these lenders are doing the same with student loans. It is easy to spot these securitized student loans as they are often labeled as SLM Student Loan Trust for Sallie Mae, National Collegiate Student Loan Trust for National Collegiate loans which are frequently associated with AES or American Education Services, and Arrowood Indemnity Company which are just some of the more popular cases we see.

We receive calls about student loan defaults and student loan lawsuits from the lenders above on a daily basis. Once it gets to the point where Arrowood, SLM, or NCSLT have the account, these agencies act like a guarantor or insurance company. So if there was a Wells Fargo student loan that went into default, eventually Arrowood or one of the others pay Wells Fargo as the guarantor and take over the debt to try and collect or recover as much of the defaulted loans as possible. We believe that there are many valid defenses available to consumers who are either being pursued or sued by these companies. These loans are securitized, sold and bought all the time, which means that these companies have the same burden to show a chain-of-title and all the proper assignment documents for the debt to have valid standing.

We have seen that aggressively defending against these companies using a myriad of affirmative defenses has led to leverage when eventually negotiating an out of court settlement. The other factor is that most of these student loan companies have contracts with local debt collection law firms who we defend against on a daily basis. It is quite frequent to see an Arrowood Indemnity case being handled by Rubin and Rothman or Meyers Saxon & Cole, or a National Collegiate case being handled by Forster and Garbus. Discover student loan cases are almost exclusively handled by Zwicker and Associates or Jaffe & Asher. The SLM cases are most popular but we have seen a mix of firms handling them. This daily familiarity defending cases against these firms has given us a boost in obtaining solid results and great settlements for our clients which can range from 30% - 80% off the alleged balance of the debt.

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