<p>My private loans paperwork was clear that the loan would have to be paid off even in the event of my death. I am finding it difficult to be sympathetic, about the loan-- not about her son’s death, without knowing more about her specific loan documents. I don’t think there’s any excuse not to read them. My parents were accutely aware of this issue and had at one point planned to pursue life insurance, but ultimately I don’t think they did… but they know the consequences of that. Fortunately for them, I purchased enough life insurance for myself to cover my debt anyway.</p>
<p>I think the student loan companies should voluntarily change the terms of their loan to erase the loan in the case of the death of the student, at least while the student is in school. That is the moral thing to do, not to send a grieving parent a bill for a student loan for a college degree that will never be completed. Either that or automatically include life insurance for the value of the loan, as someone suggested, unless the parents specifically choose to opt out.</p>
<p>She cosigned the loan so she needs to pay and the bank should not ‘forgive’ (which is a ridiculous term) the loan and essentially put it on the backs of others. </p>
<p>An implication if banks were to not really oblige the cosigner to pay is that many of the students wouldn’t be able to get the loans in the first place which then means they wouldn’t be able to attend the college. </p>
<p>This young man not only had obligations in the student loans but apparently he was also married with a young son. IMO assuming he didn’t have some pre-existing condition preventing him from getting life insurance (and I don’t know the circumstances so that’s possible) it was irresponsible of him not to have life insurance to adequately care for his family and obligations in the event something happened to him. I understand that a 24 y/o rarely thinks anything will happen to them but in the real world things do happen.</p>
<p>This mother, and any parent who cosigns a loan, needs to not just sign their name on the paperwork, they need to understand that they’re completely on the hook to repay it if the primary doesn’t pay for any reason including something as simple as them not having a job - it doesn’t need to be as severe as death. The parent shouldn’t cosign a loan if they can’t reasonably repay it and as part of that equation they should consider whether they’re the beneficiary on a life insurance policy for the student.</p>
<p>I don’t think this mother should start a petition to try to get the bank to release her of her obligations and therefore put that obligation on others (the owners/shareholders of the bank). It’s unethical for her to do that IMO.</p>
<p>This is only $10K - she should be able to pay it back fairly readily if she starts working again. That’s low enough that some people can simply sell their car and get a cheaper one and have the $10K (not saying this is the case here). If she lets this slide and assuming the bank doesn’t basically hand her the $10K to pay it, this $10K will end up costing her a lot more in penalties and interest so rather than putting the effort into getting out of it she should put the effort into paying it back.</p>
<p>I don’t know about this loan but I know with some other loans I’ve received options to have the credit life insurance to pay it off in the event something happens. I think if I owned the bank I’d want to be pretty explicit in offering it with a student loan. But realistically, that would add to the cost of the loan which might just cause the person to go elsewhere where the loan is cheaper because of not requiring the insurance. On top of that, there are many things besides death that can cause the person to default on loan so the bottom line is that the cosigner needs to be able to pay back what they oblige themselves to and promise to pay. It’s the moral thing to do.</p>
<p>Where do you draw the line with even that, Naturally? I just found out yesterday that a young woman from son’s high school, and a current juinior at a top 20 private university, unfortuntely committed suicide last week. Should any private loans be erased in that kind of situation?</p>
<p>^^I do think offering insurance with the loans would be a great idea. Then if someone says no, well that is their choice. But the suicide situation would still be a problem. A friend of a friend just lost their spouse to suicide. Unbeknown to anyone, including his wife, he had gotten into some dire financial straits. he had received a foreclosure warning notice for the house (wife did not know) and when the sheriff knocked on the door to serve one month eviction notice, the guy shot himself. I wouldn’t expect the bank to forgive the debt, but I was surprised they refused to even extend the 30 day deadline. The widow had 30 days to get out of the house. I can’t even imagine having to move out of my home at 30 days notice let alone when my spouse has just committed suicide and I have discovered I have no money and my credit is in the toilet (an insurance isn’t paying off because it is a suicide). Have to say. I think the bank could have extended a little human kindness and given her an extra 30-60 days.</p>
<p>I’m fairly certain that with all the publicity, generous people will come forward to help out this mom. Or the bank will forgive the loan to avoid more negative publicity.
Of course people should be careful what they sign and understand exactly what they are getting into. Including insurance in the loans would be a good option.</p>
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<p>I think this is an excellent idea.</p>
<p>We have friends in the same spot as this woman. As has been stated, the federal loans were forgiven but they still owe the private loan companies 60K. They fought it at first but seem resigned to it now. It’s just a terrible situation.</p>
<p>I never realized that the lender can come after the co-signer first, without trying to get payment from the loan recipient. I do read my paperwork, but somehow this didn’t sink in with me. Need to go and re-read.</p>
<p>So sorry to hear about your friends’ loss, pugmadkate.</p>
<p>In the case with this 24 year old, I assume if mom had not co-signed, the bank would have just had to write the loan off since it doesn’t sound like the son had any assets in his personal estate? Not sure exactly how these things work .</p>
<p>zoosermom, I just saw your post. They are probably coming after the co-signer since there does not seem to be anything left in the son’s estate.</p>
<p>While I think making sure one obtains a credit life/disability policy on the loan is generally a good idea (not needed and redundant and an unnecessary expense though if other life insurance will cover it), most life insurance policies have a clause where they won’t pay if the cause of death was suicide and in that age group I expect suicide is one of the leading causes of death. I’m not saying that’s what happened here because I don’t know what happened here.</p>
<p>I don’t know if those credit insurance policies would cover suicide. </p>
<p>For those of you who cosigned student loans - were you (or the primary) offered an insurance policy, if not by the lender, by other companies?</p>
<p>This woman should be able to get either private or social security or both types of disability benefits, depending on what she has at work. Maybe that would help. I would also contact a politician.</p>
<p>compmom, I feel for this woman but not sure what a politician could or should do. People die all the time and either their estate has to settle up or ,in this case, a co-signer. It is certainly tragic when a 24 year old dies but relatives of a deceased person of any age are going to get final bills that need to be settled. I will be very surprised if someone doesn’t just pay this off for her.</p>
<p>swimcatsmom–there is only a 2 year suicide clause in the standard life insurance policy. If they have had the policy for more than 2 years, they will pay unless they bought some specialty policy, like a credit policy, which will not. Term life on a healthy, non-smoking 24 year old is about $25/month for $250,000+ in coverage…get life insurance on your kids while they are still young and healthy!!</p>
<p>If it is only $10,000 she should have forgotten about the online petition and started an online campaign for contributions. I think this is a sad enough story that she would have raised the $10,000 in less than a week. I would contribute.</p>
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No - she should go back to work and earn it and pay it herself instead of trying to get someone else to pay for it. I understand she’s distraught but most people don’t simply quit working and supporting themselves when events like this occur.</p>
<p>Just something to think about…</p>
<p>My DIL has some student loans in connection with her getting her MBA at MIT. We advised my son and DIL to get a good amount of term life insurance on each of them…not a credit insurance policy. We felt this approach gave them more financial flexibility in what is sure to be a bad situation if such a horrible thing ever happens to them.</p>
<p>@GladGradDad “No - she should go back to work and earn it and pay it herself instead of trying to get someone else to pay for it. I understand she’s distraught but most people don’t simply quit working and supporting themselves when events like this occur.”</p>
<p>I suppose that is another reasonable point of view, but I have a huge amount of sympathy for someone who has lost their only child. And yes, I can imagine her being too distraught to work. Clearly from a legal perspective, the obligation is hers. But it is also clear that this elderly woman is in a very tough position and needs some help.</p>
<p>There were three loans…two federal and one private loan. The two federal loans were forgiven a month after the death of her son. So, obviously the government did not believe she, as co-signer, had an obligation to pay the loans…so why should she think she should be obligated to pay the private loan?</p>
<p>Is it common practice for federal loans to be forgiven after death, regardless of a living co-signer?</p>
<p>I believe she is responsible for these outstanding debts of her deceased son.</p>
<p>I don’t think federal loans like Staffords require a co-signer. Hopefully, someone will correct me if that is wrong.</p>
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Wait a minute - she’s 61 which most people, especially many of the parents posting here, wouldn’t characterize as ‘elderly’. ‘Elderly’ would be reserved for that person’s mother’s generation.</p>
<p>Most of us have probably had out own experiences or know someone who had experiences of losing someone like this. It’s understandable to be distraught, to take some time off of work, but I don’t think it’s normal to cause someone to no longer be able to function or work again. Most of us still have obligations and our own lives to move on with and sometimes other people to care for (as the person says she’s doing for the grandson).</p>
<p>Some people vilify the lender in cases like this (I read some of the responses to the article) but the lender isn’t at any fault in this and lent the money requested by the family to them in good faith based on this person’s promise to pay back the loan. She should do what she can to pay it back. The same people would be quite upset if they weren’t able to get the loan in the first place because of a large number of defaulters of both the primary and cosigner. It’s not fair to heap this on the lender when she promised she’d pay it back.</p>
<p>And banks, contrary to the way ‘the government’ operates, need to operate in the black and can’t simply casually dismiss payback on loans like this. But if the student obtained the government loan without a cosigner then they have no choice but to dismiss it anyway. The parent isn’t liable for her adult son’s financial obligations except for those she cosigned for and promised to be liable for.</p>
<p>At the end of the day, if she truly has no money and no resources, she won’t pay back the loan.</p>