Suing for payment of student loans

Student loans are very big business; they are the largest source of household debt outside of mortgages. With the increase in loans comes increasing defaults. And there are companies that specialize in trying to collect on defaults. One of the largest, Transworld Systems, has filed more than 38,000 lawsuits in the last three years on behalf of a single client, the National Collegiate Student Loan Trusts. However, many of these cases were flawed. In the words of Richard Cordray, the director of the Consumer Financial Protection Bureau, Transworld “sued consumers for student loans they couldn’t prove were owed and filed false and misleading affidavits in courts across the country.” In some cases Transworld employees swore that borrowers’ loans had been purchased by investors on dates that were months or even years before the loans were actually made.