New York Attorney General Opens Inquiry Into Student Loan Collection

He added, “We will conduct a full investigation and will hold the perpetrators of any fraud against our students accountable.”

A search of state court records indicates that National Collegiate’s trusts have filed at least 600 lawsuits in New York in recent years. Because most debt collection lawsuits are filed in local and county courts, where records are difficult to search, the actual tally is likely to be far larger.

In particular, Mr. Schneiderman’s office is seeking documents that would establish the trusts’ right to collect on the debts being pursued. The attorney general has asked for detailed records on the student loans’ chain of title and on the documentation that accompanied every ownership change.

Mr. Schneiderman’s subpoenas went out to both National Collegiate and to Transworld Systems, the debt collection company that hired the law firms that have initiated most of the trusts’ lawsuits against borrowers.

Transworld did not respond to requests for comment.

Donald Uderitz, the beneficial owner of National Collegiate’s trusts, said he had just received the subpoena and had not yet reviewed it.

“Right now, all I can say is given the issues we know we are dealing with, I’m not surprised and I don’t expect this to be the last state attorney general to look into this,” Mr. Uderitz said by email.

Mr. Uderitz has said that he has concerns about the trusts’ ownership paperwork and wants the lawsuits against borrowers to stop until he can more thoroughly investigate the collection problems. A continuing legal dispute between his company, the Vantage Capital Group, and others involved in the trusts has prevented him from making any changes to the trusts’ operations, he has said.

READ ---  School vaccine cuts signs of cervical cancer

Continue reading the main story