"Those borrowers had made payments after being sued over loans that were legally uncollectable, either because the statute of limitations had passed or because National Collegiate lacked the documentation needed to collect the debts in court."

This sounds a lot like what was happening during the financial crisis a decade ago. Lenders were selling mortgage loans to Wall Street to be bundled into collateralized debt obligations. After those CDOs got sold a few times, people lost track of who actually owned a particular loan. When borrowers defaulted, it was in many cases impossible to prove who was legally entitled to collect on the debt.

(A line in a spreadsheet that says John Doe owes you $500K is not very convincing evidence to a judge - you need to be able to provide a document with John Doe's signature on it.)