Due to missing paperwork proving who owns the loans, tens of thousands of people may be relieved of $5b in delinquent student debt.
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As Paperwork Goes Missing, Private Student Loan Debts May Be Wiped Away
Some of the problems playing out now in the $108 billion private student loan market are reminiscent of those that arose from the subprime mortgage crisis a decade ago, when billions of dollars in subprime mortgage loans were ruled uncollectible by courts because of missing or fake documentation. And like those troubled mortgages, private student loans — which come with higher interest rates and fewer consumer protections than federal loans — are often targeted at the most vulnerable borrowers, like those attending for-profit schools.
