Oh good grief, you just made that up. A co-signer is for when the borrower defaults on the loan FOR ANY REASON. No note ever said the co-signer is off the hook if the borrower dies. This is not “hounding” money from someone who died–it’s asking for repayment from a living person who agreed to be responsible for the debt. Without that assurance, the loan would never have been made. Why shouldn’t the bank get the benefit of the contract it made?</p>
<p>If you want a lender to walk away from a loan because something bad happened to your family, if you want “compassion”, borrow from your grandmother, not a bank. </p>
<p>I’d like to know how far those arguing for “compassion” would take things. Suppose the student has a fatal disease? Should the co-signer be off the hook? How about just a serious disease that makes the student leave school? What if the student becomes addicted to drugs and the family decides to pay for an expensive rehab facility? How about a serious depression that is resistant to all therapies? What if Johnnie is flunking all his pre-med course and decides his heart’s desire is to travel world on a bike for ten years? Should his heartbroken family be excused from repaying his loan on the basis of “compassion”?</p>
<p>Your posts come across as if you think a cosigner shouldn’t be obliged to pay back the loan they promised to pay in the event where the primary borrower died regardless of the cosigner’s ability to pay. If that was written into the loan contract then fine but if it’s not then I don’t understand why someone would try to apply ‘compassion’ and force the bank to pay in this circumstance. I can flip it around - the cosigner should have compassion for the bank and its shareholders to ensure they’re not adversely affected due to the cosigner’s failure to hold up their end of the bargain.</p>
<p>I’ll extend the point - do you think the ‘compassion’ and failure to meet the obligations on the part of the cosigner should be limited only to the death of the primary or do you think it should extend to an illness/accident that might happen to the primary, or due to the primary dipping into substance abuse, or due to the primary simply being lazy and not meeting their obligations to repay? Where are you drawing the artificial line (artificial because it’s not covered under the contract)?</p>
<p>
What do you think the purpose of cosigning a loan is?</p>
<p>The bottom line is no one can predict exactly what’ll happen to the student that can impact their ability to pay back themselves whether it be a premature death, illness/injury, substance abuse, inability to get a well paying job, further loan abuse on the student’s part (leveraging themselves to the max and impacting their ability to pay), laziness, etc. If you cosign a loan you’re taking a risk and with a student loan a substantial risk so it shouldn’t be taken lightly and no one should ever cosign any loan without having the expectation they might need to repay it themselves and without having the means to do so. To do otherwise is foolish.</p>
<p>Show compassion for the banks, GladGradDad? Seriously? If my memory serves me correctly, banks primarily exist to make a profit. Banks are not “people”, GladGradDad. During the Great Recession, it took federal intervention to address the foreclosure crisis because banks were profiting off of families’ misery and suffering. According to this [url='<a href=“http://chronicle.com/article/Student-Loan-Debt-Collection/131816/]article[/url”>http://chronicle.com/article/Student-Loan-Debt-Collection/131816/]article[/url</a>], private lenders and collection agencies profit more on student loan defaults (which can cripple a person’s credit history for the rest of their lives) than on-time loan payments. Banks and other financial institutions have NO incentive to show compassion for borrowers who may be experiencing extenuating and unforeseen circumstances. </p>
<p>" This is an ethics issue, and private lenders should treat each situation individually. Hounding families for money owed by a loved one who is permanently dead is immoral and wrong"</p>
<p>Does that apply to medical debt as well? Should hospitals / doctors forgive the cost of treatment owed if a patient undergoes expensive treatment and dies anyway?</p>
<p>I think it’s awful that funeral homes charge bereaved parents money to take care of their child’s remains in a dignified and respectful manner. How callous of them to charge parents for a coffin and for transporting the body to the cemetery. As if the pain of losing a child isn’t enough.</p>
<p>There’s a simple solution for people who have the viewpont you and some others have - If people don’t want to deal with (the evil in your characterization) banks, then they simply shouldn’t deal with them. No one’s forcing people to go seek out a particular bank, actively request that the bank take a risk on them and loan them money and go so far as to sign a contract with them promising to pay it back (but feel justified in not doing so because of personal circumstances).</p>
<p>It’s very simple - don’t seek out a loan, don’t sign the loan contract, don’t cosign, and you won’t have to deal with any of this. But if you DO decide to deal with the bank, ASK them to give you a loan in good faith, and SIGN a contract to that effect, then do the right thing and pay it back as you promised.</p>
<p>The American health care system is also screwed up (I can mention several real-life stories of patients with serious injuries being discharged too soon because they lacked adequate health insurance, but I digress), but in regards to your question, medical debt can be discharged in bankruptcy. Can’t say the same for student loans.</p>
<p>Wow, this is the first time that i have thought about this issue…I am very surprised that the co-signer did actually get out of paying. I am actually amazed because isn’t that the whole point of getting a cosigner in the first place??? </p>
<p>I think the idea that was tossed out on this thread about life insurance is the best idea. It makes perfect sense and would probably not cost very much either. I would not be surprised if banks and loaning institutions did not start requiring something like that with the way the economy has been. </p>
<p>I can’t imagine having to deal with your child dying so young and with so much promise ahead of them. That is just so sad…Then having to deal with the nightmare of issues that happen after, such as a large amount of debt. It would be the best move for anyone that wants to help out anyone else as a co-signer to have the person that they are helping get a life insurance policy. For relatively small payout and the fact that the student is so young, it would be very low cost payments.</p>
<p>I thought about this thread when I heard about this story - a young man scheduled to graduate from Harvard Business School on Thursday is missing after he was kicked out of a Portland bar for overintoxication. They found an article of his clothing in Portland Harbor - does not look good. He is 31 years old and his wife is expecting their first baby. Really tragic. I don’t know what his friends were thinking to let hm leave the bar by himself.</p>
<p>Would his wife be responsible for student loans?</p>
No, but his estate would be responsible for them. I don’t know what would happen if they have joint assets. She wouldn’t have personal liability for his debts (unless she cosigned, of course).</p>
<p>But they do, and people continue to borrow to pay for them. If you borrow, you owe. So remember, kids … don’t get in over your head. There probably are less expensive alternatives.</p>