With borrowers facing billions of dollars in education-related debt due to the rising cost of higher education over the past few decades, student loans are already a hot topic. The topic has gotten even more attention lately due to the discovery that billions of dollars – $5 billion to be exact – in student loan debt may vanish completely due to missing paperwork and poor recordkeeping on the part of private lenders. While that might be great news for indebted students, it’s terrible news for these lenders.
How could anyone let such an expensive mistake happen? Well, student loans are bought and sold among lenders all the time, so while a student does choose the bank they borrow from initially, their loan may change hands among other banks and investors many times throughout its life.
Naturally, loans being passed around increases the risk of losing important accompanying paperwork – if you’ve ever lost something in a move to a new home, you’ll know exactly what that’s like. But without a paper trail that proves the loan’s chain of ownership, the debt collection can’t be enforced. Collections cases brought against borrowers with defaulted loans have even been thrown out in court, forcing lenders to forgive thousands in dollars in debt because they couldn’t prove they owned the loans.
Moral of the story: don’t lose important documents. Losing track of your organization’s critical paperwork may not cost you billions like it might for these private student loan lenders, but there are still plenty of potential legal and financial ramifications to it, like the risks of non-compliance and not passing audits. So we’re sharing a few solutions that can prevent a disaster like this from happening to you.
Document scanning and indexing
The best insurance against losing paperwork is to not keep any paperwork to begin with. You should seriously consider going digital with your organization’s records using document scanning and indexing.
Document scanning eliminates the hassle of maintaining a paper filing system with heavy boxes or bulky filing cabinets by creating digital images of every document, and indexing allows you to search for your documents using criteria of your choice. That means you’ll be able to find the document you’re looking for instantly by searching a date, barcode, customer name or ID number, or even a keyword. Being audited? No longer a problem. Just search for the files the auditor requested, zip, and send.
And it’s not only your typical 8.5” x 11” documents that can be scanned and indexed – a good document scanning partner will have the right technology and expertise to scan and digitize any kind of document you have, even oversized engineering prints and microfilm/fiche.
Digitizing and indexing all your documents means they’re safe and secure, protected from the types of threats that affect paper files, like the risk of losing them in a move or potential damage by fire or flood.
Document management software
Okay, so your files are digitized and indexed. Now you need a simple way to organize them, and for this we recommend implementing document management software. Document management software allows you to easily maintain an organized file structure without having to fuss with cumbersome file naming conventions or a cluttered desktop.
You’ll be able to securely access your digital documents from any computer or mobile device, and if you’re in a situation where you need to securely share files (say some of the student loans you own have been purchased by another bank, for example), it can be done instantly right from a computer. No one will have to worry about the logistics of moving paper files or asking administrative staff to scan them all manually.
Save yourself from financial risk and work with Digiscribe to digitize your files before the worst happens. (We can think of a few private student loan lenders who must be sorry they didn’t go digital years ago!)