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,
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.