Creditors' Burden of Proof in Student Loan Cases

To file a lawsuit, the Plaintiff is required to have standing. In order to satisfy the standing requirement:

  • The plaintiff must have suffered an injury;
  • Caused by defendant's actions;
  • With a likelihood that the injury could be redressed by the court's decision.

Essentially, the plaintiff must be the real party in interest to fulfill the standing requirement. With regard to student loans, in order to establish that the plaintiff is the real party in interest with standing to sue, the plaintiff must prove the following:

  1. Defendant signed the promissory note;
  2. Plaintiff is the present owner or holder of the note; and
  3. The note is in default.[1]

Signed Promissory Note

With the advent of the digital age, the use of electronic promissory notes present new obstacles in proving the existence of a signed promissory note. Nevertheless, electronic notes must be stored and able to be retrieved electronically. Lack of a signed promissory note, whether electronic or paper, could prove to be fatal to the defendant's case in a student loan suit.

Present Holder of the Note

The second required prong of the test to establish a prima facie case for recovery on a defaulted student loan is proving the plaintiff is the present holder of the note. If the promissory note has been sold or assigned to a new entity, only the assignee would have standing to sue on the defaulted note.

Defaulted Note

Finally, the plaintiff must prove the defendant has defaulted on the student loan in question in order to survive a motion for summary judgment and establish a prima facie case.

If you are being sued over a defaulted student loan you should explore your legal options immediately before taking any action. If you have any questions or comments, please feel free to contact us.



[1] Federal Deposit Insurance Company v. McCrary, 977 F.2d 192, 194 n. 5 (5th Cir.1992); see also U.S. v. Bielinski, 2012 WL 1802303, at *2 (N.D.N.Y.,2012)

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