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Co-Signed Student Loans

Submitted by on Thu, 01/24/2008 - 03:45
Posts: 202330

I decided to try to help my step father out and co-sign his student loans. At the time he was working in a very good job and could afford the payments when they started to occur. But of course with my luck, he was laid off and to this day is still trying to recover from the financial loss he gained from being laid off.

I co-signed three student loans for him, two unsecured loans from COLLEGIATE FUNDING/GLELSI and one student loan from NATIONAL COLLEGIATE TRUST (I am getting the names from my credit report, don't know if that's the actual names of the companies.)

I have come to the realization that the only way I am going to fix my credit is to assist him with the payments of the student loans, but even with our income combined we can't afford the total payments of all the loans as well as all our other bills.

Combined, the loans come out to a total of approx. $68,000 with monthly payments being approx. $750. Does anyone have any tips on what routes we can take in order to rid us of our problem?

Any help would be greatly appreciated. Thanks!

The only legal provision that protects NCT from having the loans they made discharged under bankruptcy is that NCT is a NON PROFIT entity.

Specifically, any governmental or non-profit entity that engages in lending money to be used for educational purposes is immune from the borrower seeking Chapter(s) 7 or 13 protection. This protection DOES NOT APPLY to loans that ORIGINATED under a FOR PROFIT entity and were later purchased by a NON PROFIT entity as the original loan, while intended for educational costs originated as a consumer loan.
You can thank those that borrowed money from Uncle Sam and non-profit entities to escape being drafted during Vietnam and, as soon as the draft ended, filed Bankruptcy to get out of having to pay the loans back while still enjoying the fruits of their advanced welfare degrees - most of them now doctors, engineers, and lawyers making salaries that were and are more than enough to cover the repayments.

It is also for this reason that you are unable to consolidate your private school loans under the Federal Title IV higher education loan laws.

You mentioned that Chase Bank - a FOR PROFIT entity - was the original lender in your post. Since you did not ORIGINALLY seek and obtain a loan to attend school through a NON PROFIT entity (like AES/NCT), NCTs purchase of your loan does not afford them the Bankruptcy protections they enjoy under loans that originate under them. They'll tell you it does. They're lying.


Because the case could be made that while you did not seek an education loan with the intention of defaulting and filing BK, you similarly DID NOT SEEK a loan from such an organization that was protected by those provisions in case something came up in your future and you found yourself in need of seeking your right to protection under the bankruptcy laws. Your actions in avoiding such a NON PROFIT or GOVERNMENTAL organization should only be taking as the actions of a knowledgeable consumer making educated choices concerning the purchase of financial products in a free market economy. NCTs purchase of your loan - which I assume occurred without your knowledge or consent - should not afford them protections you specifically made sure the lender you chose, Chase, did not have available to them.

Somebody in their offices screwed up BIG TIME by purchasing that loan so I say use it to your advantage. Bring this issue to their attention and see what they say. If they are unwilling to work with you, get a lawyer and file the 7 or 13 BK motion if you find yourself without other options, and happily give them the one finger salute on your way out the door.

Here is an excellent article on Student Loans and Bankruptcy:

Submitted by on Tue, 03/08/2011 - 07:49

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If I could give one piece of advice to any college student it would be to stay away from NCT, AES or any other private lender. Yes, you will get screwed. Unless you can afford to pay them what they want beginning month one after you graduate, they will be nothing but a thorn in your side until you die, become permanantly disabled or pay them off.

My advice as a single, unemployed, mother of 3... leave AES, Chase, NCT alone. They won't reduce my $300 a month payment and we are barely able to feed our kids. When I told them this their reply was "this isn't our fault you signed the papers. If you don't pay then we will begin collection phone calls on your account immediatly."

Submitted by on Wed, 03/16/2011 - 11:52

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This should be said of all private student most cases you dont have a choice of who is going to service your loan or who it is sold to if you default. Students just dont take the time to educate themselves about their financial aid....they just sign and go without reading what they are signing for. Students are screwing themselves....the lenders/servicers are only doing their jobs.

Submitted by SOAPLADY on Wed, 03/16/2011 - 12:01


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My ex-husband forged my signature as a co-signer on a student loan. Now the collection agency is after me and the only way I knew about this debt was through checking my credit report. I confronted him about the situation and he claims he will pay for it. I put it on our divorce decree that he is responsible for the loan debt that he made. What can I do to get my name off the loan that I never signed?

Submitted by on Wed, 03/23/2011 - 17:26

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Divorce decrees are not enforceable meaning the lender is under no obligation to remove your name. The only way you are going to get this out of your name and off your credit is to file a police report for fraud. Otherwise you will have to deal with the collection agency and a potential law suit.

Submitted by SOAPLADY on Wed, 03/23/2011 - 18:54


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AES/NCT/Bank of America - These loans are structured pretty much like the mortgages of the era. In addition to the stated interest from AES the servicer, there is DAILY interest added to the principal which is the LIBOR rate which is interest swaps,foreign currency and forward rate agreements. The rate is posted in the wall street journal on the day following the month close. Technically, you could pay these loans on time and even more than what is required and you will never pay them off. Don't waste your time with AES, go directly to the Federal Trade Commission and the National Banking Commissioners office to file a complaint. Maybe if enough people begin to file complaints they will begin to take notice. As to NCT - according to the SEC filings in 2007 it is 2 person company that took over most of the Bank America loans. Good Luck on locating them because "trust" is just what it is. Pay attention, to balances, use print screens to document, do not pay via EFT and fax all correspondence. This whole thing is such a scam. Good Luck

Submitted by on Sun, 03/27/2011 - 16:23

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NCT has completely ruined my credit! Back in 2006 and 2007 my parents co-signed on 2 loans, but I am the primary borrower. I have remained in school up until present day and the loans were a full deferrel until I graduate. Since then my parents have had to file Ch 13 BK and NCT put the loans in a default status and put it on my credit reports that a claim was file with the government. I FINALLY got their number (1-866-236-6606) and have called several times and keep getting the same answer, which is there is nothing I can do about the status my loans are in, even though they were in defferment prior to my co-signers bankruptcy and I am the primary borrower who did not file for bankruptcy. They said once my co-signers bankruptcy is over my loans would be sent to a collections agency!! I dont see how this is fair???? I will gladly pay my loans once I graduate in a year and I was never contacted about these loans going into default so how can this be legal?? Please someone help!! My co-signers BK attorney said it wasnt accurate to do this to these loans but he cannot represent me because he is representing my parents and I dont have money to get an attorney to fight these people.....any advise from anyone would be greatly appreciated!! I have worked hard to maintain good credit all while being in school and they came in a wrecked it just like that!

Submitted by on Thu, 03/31/2011 - 09:44

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Sorry, but NCT has not ruined your credit....your parents bankruptcy has. Obviously their attorney didnt not know and didnt research how filing BK on a private student loan will affect the other parties involved or the reprecussions. Defaulting a loan upon bankruptcy is STANDARD in the student loan industry and there is nothing you can do to change it. There is no obligation for the lender to contact you upon the bankruptcy is standard to default the loan because the bankruptcy shows intent of one of the parties cannot or will not pay as agreed. The cosignor is just as responsible for the debt as the student.....there is no distingushing one from the are equal parties.

Submitted by SOAPLADY on Thu, 03/31/2011 - 14:14


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I am literally in the exact same boat except my aunt was my co-signer, i do not see how this is legal at all that we have received nothing at all stating that we owe money until MRS Associates calls and says we owe x amount of dollars, there is no way i can even afford payments, they are asking for $1000 per month for 2 yearas and I am still in school! I ahve no clue what to do and my credit is comepltely screwed as well!

Submitted by on Tue, 04/05/2011 - 07:01

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My fiance is dealing with NCT as well. I think she has a civil claim as to misleading and fraudulent representations with this company in respect to promises and assurances made when she first signed the student loan.

The system is extremely stacked against the student however. Regardless of whatever legal protections NCT and others like them enjoy, it doesn't change the fact that they are extremely unethical and predatory. They rely and take advantage of ill-informed and inexperienced students and then game an unbelievably unbalanced legal and collections system for student loans.

Do *NOT* deal with them under any circumstances. There are significantly better alternatives available. Only in the US do you have such an institutionalization of bloodsucking greedy conglomerates preying on naive students just trying to get an education. It is a disgrace.

Submitted by on Fri, 04/29/2011 - 10:36

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My fiance is dealing with NCT as well. I think she has a civil claim as to misleading and fraudulent representations with this company in respect to promises and assurances made when she first signed the student loan.

Neither NCT nor any lender makes any representations or promises...they are simply the lender. Sounds like you have a beef against the school...the lender would not be a party to that type of complaint.

Did your finance read what she was signing? Investigate all claims made by the school?

Submitted by SOAPLADY on Fri, 04/29/2011 - 16:51


( Posts: 17315 | Credits: ) is a credit counseling service that claims they can get AES to accept a settlement offer, is this even possible? Have you ever heard of AES settling with anyone through a debt relief service? I tried to do some research on and I cant find anything out about them!

Submitted by on Thu, 06/09/2011 - 22:39

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I just got off the phone with using numbers from here to contact National Collegiate Trust. It went from calling AES, next to Marblehead default, to NAN, which I was told when the lady answered the phone was NCO, I asked if it was NAN, and she stated yes, but answers the phone that way. Wanted all my personal information before she would even tell me if she had my loan or not, they all did. Then NCO stated that I needed to call Pollack and Rosen, PA in coral cables, FL. So I call them, and they state they are an attorneys office. The guy I am speaking with asks me all my personal information, I ask whom am I speaking with and job title before i am going to give him anymore, turns out, he is a collector too, for the attorney. My original loan for National Collegiate was for 20,000.00 in 2006. I got done with school in 2007 in December. This loan is now 33884.00. this is only one loan. I have other ones, one which is now garnishing my wages as of today 214.11 biweekly, and I am a single mother not receiving any child support. I went through a company called ERS that was supposed to help me for 9 months make substantial steady payments to them with 3000.00 my parents gave them, which we never got a receipt for nor do we even know where that 3000 went. and they were going to consolidate my loans with Direct Loans Consolidation. I filled out a packet of paperwork that took hours. Sent them tons of personal information and paystubs, etc. Gave them the names of my loans and account numbers, including mine for national Collegiate. ERS didn't put it on the consolidation or two other ones. Now I am being sued I guess from National Collegiate but haven't received a summons, and they stated this attorney's office tried to send me a letter. I NEVER received a letter. Wouldn't they send that certified? Well, they had my correct address and nothing ever came. FL Dept of Education now garnished my wages as of TODAY and their loan was also in the alleged consolidation, and so was a loan by Texas Guaranteed. They took my tax returns for two years and I didn't even file yet waiting for the consolidation that now has never taken place that I was told did. I tried to call Morgan and Morgan today and was told the case was "accepted" and then to have someone from the attorney's office call me and refer me to another one outside of them with a 250.00 consultation fee. I can't get anyone to help me and my son. He's 8. We will be homeless at the end of next month. I have no family to move in with, I drive an old truck that has 126000 that has a leaking radiator that I can't afford to fix. I cannot get another apartment, because this stuff screwed my credit so bad I can't even get an apartment and I can't get a new vehicle or used because of my credit. and there is now no way out. If it weren't for my son finding me dead, I would kill myself tonight. I'm over 80000.00 in debt to these loans now with no way out.....ever. I don't make enough money to ever in my life pay them back and survive to feed my son and keep a roof over our heads. I will never be able to get a home, or a car, or even an apartment again and now they garnished my wages without even notification to me. That's right, I was told they didn't have to notify me. They sent 2 notices to my employers offsite payroll company who never notified my employer and now I can't even pay my rent. I have already lost my home over these loans and now we will be homeless. I am a nurse. That's right, a nurse and this happened to me. Years of deferring loans and going back to school. and don't ever ever go to those schools for medical transcription and coding...and such. They will charge you 12k to do those 8 month programs and you CANNOT make any money to ever pay back those loans either. that is where a lot of my loans come from. Oh, and I wanted to go back to school to get my nurse practitioner master degree. Those dreams are gone. Defaulted loans=no more loans for school. I am so desperate I even called abc action news and emailed them to see if anyone could help me and if I could take any action against the creditor/predator ERS whom I in good faith entered into their program to consolidate all my loans and have the default status removed off my credit report "as it never was there" I was told by Alex...well, Alex won't return calls and neither will his manager. Thanks ERS for ruining my life when I tried to get back on track. Now I am being sued by National Collegiate Trust's legal team, and I am being garnished by Fl Dept of education and we will be homeless. If anyone knows anyway I can get some help please please post.

Submitted by on Wed, 06/20/2012 - 15:42

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First Mistake...National Colliegiate Trust is a private lender. The loan was never eligible for consoldation with DIrect Loans with your federal loans.

I take it you are in FLorida...Morgan and Morgan is my attorney on my workers comp case.
Register with the forum and PM me....I probably can help you and save you the legal consultation fee.

Submitted by SOAPLADY on Wed, 06/20/2012 - 16:12


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Thanks for deleting my very serious post soap lady. I guess if you have life changing information on here and it is too serious of nature, they delete it

Submitted by on Wed, 06/20/2012 - 17:30

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In case anyone out there is still looking for their number, it's (800) 895-4283. The person who answers will be from First Marblehead, ask to be transferred to Nat'l Collegiate Trust.

Submitted by on Tue, 11/27/2012 - 09:04

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