Student loans haunt college graduates long after they receive their diplomas, but due to missing paperwork, $5 billion of loan debt could be wiped away.
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The FOX Business Network’s Tracee Carrasco reports that private loans issued by the National Collegiate Student Loans Trust are missing critical paperwork, according to the New York Times.
The 166,000 separate loans, which total $5 billion, are now at the center of a legal battle.
Since the loans were originally granted to students by banks and then bundled and sold to National Collegiate, it is unclear who exactly owns the individual loans, and if National Collegiate cannot prove official documentation in court a judge will be forced to throw them out.
Student loans account for $1.4 trillion of debt nationwide, and judges have begun clearing debts in New York, New Jersey, Texas and Ohio.