Have a student loan with National Collegiate Student Loan Trust (NCT)? Here’s what you need to know

National Collegiate Student Loan Trust (NCT) is one of the nation’s largest holders of private student loan debt, but it’s not a company. As the name implies, National Collegiate is a set of trusts used to purchase existing student loans held by originating lenders. Owned by Turnstile Capital Management, the trust holds billions of dollars in student loans.

Related article: Here’s what you need to know about repayment options for private student loans

So what does this mean for you as a private student loan borrower? If National Collegiate purchased your loan, it may be tough to contact someone. To start, the trust doesn’t have a website, and finding a contact phone number can be challenging. Here’s what you need to know about paying back a loan held by NCT, and what to do if you fall behind on your payments.

How do I contact NCT?

If your original lender sold your loan to National Collegiate Student Loan Trust, you should have received a notice of this in the mail. Your credit report will also reflect this change. However, that doesn’t mean that National Collegiate is who you’ll deal with if you have issues or questions. Your loan could be being “serviced” by another company.

Many of the trust’s loans are serviced by American Education Services (AES). Fortunately, AES does have a website and can be contacted via phone, mail, email or fax. 

Related article: Have a student loan with American Education Services (AES)? Here’s what you need to know

How did National Collegiate get my loan?

The short answer is: It’s complicated. If you originally got a loan through a bank such as Bank of America, JPMorgan Chase Bank, Charter One Bank, Union Federal Savings Bank or any other well-known large financial institution, chances are, they sold your loan. These banks are referred to as the originators of your loan. Soon after they lend you the money, the bank transfers the loan to the National Collegiate Funding LLC, who hangs onto the loan until it gets deposited into NCT. This funding institution is called the depositor. 

But none of these entities actually collects your student loan payments. That’s the job of the servicer, such as AES, who sends you bills each month. The servicer is paid by NCT, which owns the loan.

How can I be sure that National Collegiate really owns my loan?

NCT sometimes lacks the necessary supporting documentation to prove its ownership of a loan when taking borrowers to court over delinquent accounts. That’s because NCT is made up of many trusts; each trust includes thousands of loans; and private student loan owners such as NCT are often unable to provide proof of transactions.

In a settlement over this issue with the Consumer Financial Protection Bureau in September 2017, NCT agreed to pay $19 million in fines and borrower refunds. Part of the settlement required National Collegiate to set aside $3.5 million for refunds to 2,000 borrowers, who made payments after being sued over loans that were legally uncollectible. In some cases, the statute of limitations had passed. In others, NCT couldn’t provide the necessary documentation in court.

Related article: Is your debt time-barred? A state-by-state guide to debt statutes of limitations

Michael Bovee, who co-founded Resolve and has been helping people manage their debt for more than 20 years, cautions that this doesn’t mean you should stop paying on your loan if you are current on payments. If you withhold payment with the hope that NCT sues you and then can’t prove ownership of your loan, your nonpayment could hurt your credit. 

Related article: States where people have the most & least student loan debt

What if I fall behind on payments to NCT?

If your financial challenges are temporary, you may want to contact the loan servicer to request a deferment or forbearance. Either of these will provide a temporary break from making payments. With a deferment, you may not be responsible for the interest that accrues during the break. With forbearance, you will be. This interest can likely be paid as it accrues or added to the balance.

If you’re dealing with financial challenges that are going to be long-term, but you can pull together some funds or borrow from a friend or family member, one option available to you is to negotiate a settlement. 

“NCT is an aggressive private lender, but there is often the possibility of settling with them or their collection agencies through extensive negotiations,” said Bovee. “I’ve done quite a few settlements with NCT and have found them to be very difficult but ultimately, they’re willing to settle for between 40 and 60 percent of the balance in the right circumstances. We’ve been able to negotiate structured settlement terms with NCT of two years or longer, which makes settlement a much more affordable option than paying a lump sum.”

Negotiating a settlement keeps you out of court and can restore your credit more quickly than waiting out a potential lawsuit. 

Outside of these approaches, your options are limited. Unfortunately, while federally backed student loans have a breadth of repayment programs, private student loans do not. You can learn more in the article, “Here’s what you need to know about repayment options for private student loans.”

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