MOm wants dead son's student loans forgiven

[handinpocket]

Wow, it seems like someone somewhere could work something out in this extreme situation. The woman doesn't have the money. She is supporting her son's child. The OP's statement that the death of her son was 'very unfortunate' made me cough on my coffee. Yeah, I would say it's 'very unfortunate' and I'm sure I wouldn't use those words if my son died when he was 24.

I'd like to know what private institution has refused to help and if they benefited as a part of the bail out of 2008. Banks are heartless. Perhaps they could renegotiate this loan making it only the principle to be paid back and the payments more manageable.

My thoughts as well.

 

[disykat]

If she had asked for help, perhaps she would have gotten some - from a bunch of different places. It appears that she has chosen to fight the charges with the "I shouldn't owe this" tactic, which is simply not true.

 

[eliza61]

I'm in my 60's and I like to have great credit! I plan on being around for another for another 20-25 years.

How many more mortgages do you plan to apply for? How many more car loans?

34 is the average age of first time home buyers.
60 and beyond are actually getting reverse mortgages. LOL.

do you plan on getting a new house at 80 or 85? Sorry in fact a lot of 80 year olds are trying to get rid of assets so they won't go destitute trying to get long tern care.

I'm approaching retirement and really don't give much fig to my credit score. My house is paid off, my cars are paid off. don't need great credit to get a new one as if I need one it will be used and either paid off fully or a huge down payment. And as I said, at least in NJ every other commercial is from a car dealer screaming that you can get a new car for $1 dollar down.

Just saying typically at that age, major credit purchases are behind folks. In fact, most are doing the naked "I just got finished paying my mortgage" dance.

Most seniors I know are like me, if I ain't got it by now and I can't get it with cash, then you know what, I don't need it.

 

[Social Worker Sue]

at her age, would it matter?

Oh, I think at 61 credit still matters

Heck, my partner's 79 year old mother just bought a new car. She books cruises on her credit cards and gets rewards back. Of course, she pays it in full, but a credit card is more convenient than cash, whether you are 30 or 80. Her credit is excellent and she is darn proud of that!

Not all people think "Oh well. I am old. I don't need good credit."

 

[Lionqueen2]

I may have missed this but was this a "big bank" loan? The answer doesn't change my opinion that she should pay I was just curious.

I know folks like to vilify financial organizations but there are still small banks around - these are banks that cannot rely on falling back on their huge customer base when folks cannot pay back loans, etc.

I agree!

There are many sad stories in this world and this woman's situation is one of them, however, she does owe the money. She cosigned the loan and that is a promise to pay it back. If an institution were to forgive this woman's loan, they then would have to do the same for everyone else with a sad story who had a loan from their institution.

This mother is 61 years old which is young for someone with financial problems to consider retiring. I'm also sure that the mother of her grandchild is getting some kind of support from the government although it is kind of the grandmother to try and provide some additional help. Perhaps there are other family members that could help provide some extras for the grandchild while the grandmother works to pay back the loan.

You are correct that some people have no problem vilifing organizations, but they also need to realize that hard working folks trying to save a few dollars put money in these banks. The banks do have responsibilities to their depositors. The bank is not a charity. These are hard facts to understand, but they are facts of life. It is one of the reasons people should not borrow money easily and institutions should not loan money easily.

 

[sissy_ib]

How many more mortgages do you plan to apply for? How many more car loans?

34 is the average age of first time home buyers.
60 and beyond are actually getting reverse mortgages. LOL.

do you plan on getting a new house at 80 or 85? Sorry in fact a lot of 80 year olds are trying to get rid of assets so they won't go destitute trying to get long tern care.

I'm approaching retirement and really don't give much fig to my credit score. My house is paid off, my cars are paid off. don't need great credit to get a new one as if I need one it will be used and either paid off fully or a huge down payment. And as I said, at least in NJ every other commercial is from a car dealer screaming that you can get a new car for $1 dollar down.

Just saying typically at that age, major credit purchases are behind folks. In fact, most are doing the naked "I just got finished paying my mortgage" dance.

Most seniors I know are like me, if I ain't got it by now and I can't get it with cash, then you know what, I don't need it.

My FIL just retired in September. He'll be 63 the end of December. They sold their house, moved here to Texas and bought a brand new house. My grandparents moved a few years ago and bought a house. They are in their 70s. So yes, there are people in their 60s+ getting mortgages. Just because you wouldn't doesn't mean none are.

 

[mnrose]

I don't want to come across as too cold hearted, but who will pay this loan off if the co-signer doesn't? Answer: all of us will in the form of higher rates/fees. No financial institution is in the business to lose money.

It sounds like the federal government forgave the loans...that is, we, the taxpayers, paid for the loan.

There is no question that the money was lent. No question that she co-signed the loan. Therefore, she must pay it back. That's the way the world works.

I'm getting pretty tired of bailing people out, frankly. I own my two homes (paid cash). They both have declined in value (of course, the property taxes keep getting higher nonetheless!), and I've received not one penny in forgiven debt, bail outs, etc. I've lost money too. But, people who walked away from mortgages and homes, etc, had their losses covered. It sucks to be responsible I guess.

 

[christineann]

Those who walk away from their student (and other) loans may think it doesn't affect their ability to get credit, but it certainly does affect the rate. A friend who owns a car dealership told me he has had customers who don't understand why they have to pay high interest rates on car loans - they pay their credit cards and mortgages but don't pay their student loans (as if those don't matter). A former coworker of mine asked me if 8.5% was a good interest rate on a loan for a new car

 

[Free4Life11]

I say she got lucky that the 2 federal loans dissolved her after his death and she needs to pay this private loan.

What? The federal loans were HIS. She is in no way "lucky" that the feds discharged the loans. Yeah, she is REAL lucky that her son died so the feds wrote off HIS loans. All Federal student loans are discharged if the student dies.

Regarding the private loan, I think it's ridiculous. The borrower is dead. Write off the loans. There are many private student loans that DO get discharged when the BORROWER dies. After all of this negative publicity, they will probably write off the loans. Why did the BANK approve this lady in the first place if she did not have enough income to cover the loan payments?

I think the disclosure statement, not the fine print, should CLEARLY indicate if the loan will NOT be discharged upon the student/borrower's death.

And please, the vast majority of students do NOT die prematurely leaving their co-signers holding the bag.

 

[mom2boys]

In my opinion, despite the tragic loss, she co-signed on the loan and the obligation belongs to her now that her son has passed. Co-signing for a loan should never be taken lightly, when you do co-sign you are making an agreement, per the loan documents and what your signature attests to that you are just as liable as the primary borrower.

I feel for her. Co-signing a loan means, if the borrower can't or won't pay, you are on the hook. I co-signed my son's student loan. If something happens to him, I know I have to pay the loan.

 

[jlewisinsyr]

Regarding the private loan, I think it's ridiculous. The borrower is dead. Write off the loans. There are many private student loans that DO get discharged when the BORROWER dies. After all of this negative publicity, they will probably write off the loans. Why did the BANK approve this lady in the first place if she did not have enough income to cover the loan payments?

I think the disclosure statement, not the fine print, should CLEARLY indicate if the loan will NOT be discharged upon the student/borrower's death.

And please, the vast majority of students do NOT die prematurely leaving their co-signers holding the bag.

As she co-signed, all of the borrowers are not dead.

 

[MrsPete]

I think the problem here is that the mom didn't understand what she was doing when she co-signed for the loan.

She didn't understand

- that she was making a business transaction.
- that the loan company was out to make money, not help students get through school.
- that she was legally responsible to hold up her end of the bargain.

I can see that young people might not realize what they're getting into when they take out student loans, but how does a person live 61 years and not grasp these financial basics? It's a very sad story, but her lack of financial knowledge is just as sad as the situation in which she finds herself.

 

[robinb]

Why did the BANK approve this lady in the first place if she did not have enough income to cover the loan payments?

It does make you wonder doesn't it? My guess is, just like subprime mortgages, the bank simply did not care.

 

[westjones]

I think the problem here is that the mom didn't understand what she was doing when she co-signed for the loan.

She didn't understand

- that she was making a business transaction.
- that the loan company was out to make money, not help students get through school.
- that she was legally responsible to hold up her end of the bargain.

I can see that young people might not realize what they're getting into when they take out student loans, but how does a person live 61 years and not grasp these financial basics? It's a very sad story, but her lack of financial knowledge is just as sad as the situation in which she finds herself.

Haven't student loans changed a lot over the years? Seems to me back in the early 80s when I took out loans, they were government loans and I was able to borrow enough to go to college, live in a dorm and pay for books. Once a year I took out one loan. I don't remember if my dad co-signed or not, but his name was not on the payment stubs that I had which I sent in each month for payments starting a year after I graduated.

Now days, students can't take out enough in the government student loans to cover the costs, so then these private student loans started becoming popular, and they are so different than what 'student loans' were when I was a college student.

She may have not realized how much things have changed over the past decades in regards to financing college expenses. We only became aware of all of this while our kids were in high school and we were surprised how much things have changed.

I don't think my MIL would have understood any of this and so if my DD's grandmother had been involved she would have thought it was like it was in the early 80s.

Now I am not saying that ignorance is an excuse. I know in our society it isn't. But it would be really helpful and might avoid a lot of problems if things were explained in greater detail. My DH and I had two presentations that we attended at my DD's high school that brought a lot of these details to our attention. This grandmother probably had nothing like this to help her understand the situation.

Anyway, I understand she is responsible and I understand that is what it means when you co-sign. I am just saying I could see how she might not have fully understood what she was signing and that she may have assumed things that were not correct.

Regardless, it is a very sad situation.

 

[sissy_ib]

What? The federal loans were HIS. She is in no way "lucky" that the feds discharged the loans. Yeah, she is REAL lucky that her son died so the feds wrote off HIS loans. All Federal student loans are discharged if the student dies.

Regarding the private loan, I think it's ridiculous. The borrower is dead. Write off the loans. There are many private student loans that DO get discharged when the BORROWER dies. After all of this negative publicity, they will probably write off the loans. Why did the BANK approve this lady in the first place if she did not have enough income to cover the loan payments?

I think the disclosure statement, not the fine print, should CLEARLY indicate if the loan will NOT be discharged upon the student/borrower's death.

And please, the vast majority of students do NOT die prematurely leaving their co-signers holding the bag.

This is a perfect example of not understanding what a co-signer is. There are two borrowers. It doesn't matter what the loan is for, a car, house, college or whatever. If the first person does not or can not pay the other person is responsible. If there was no co-signer it would have been written off.

 

[FlightlessDuck]

The entire situation seems rather heartless.

 

[sissy_ib]

The entire situation seems rather heartless.

How? How is it heartless? She agreed to repay the loan if her son could not. How is it heartless that someone gave them tens of thousands of dollars and now wants to be repaid?

Speaking of not repaying student loans.

Student-Loan Delinquencies Now Surpass Credit Cards

 

[disykat]

The borrower is dead. .

No she's not, she's 61 and this thread is about her.


Sadly, the person who went to school is dead, but the loans still belong to the living person who took them out.

 

[HonnyDipp]

she signed the contract. As the co-signer, she's responsible for the debt. I'm sorry for her loss, but her son received the education.

 

[Arielle22]

How did that theory work out during the mortgage crisis?

Did people who paid attention to their mortgages and how much they could afford end up getting penalized? Yep. When they used tax payers money to bail out the banks from those risky loans, you and I officially got penalized.

How did it work out during the credit card crisis?

When the banks where giving out cc cards to students (who they knew had zero interest. my sons got tons of credit card) and unemployed folks. what happen to the interest rates on those who paid their bills on time but may not have had absolutely perfect credit scores?
The cost of borrowing went up for quite a few folks.



To think these things work in some type of isolation chamber is dangerous.

And guys I'm not talking for banks to sit down and go microscopic, line by line with a person but let's say in this womens case the bank (if it was a bank) said to son, since you need a cosigner we're going to require you take out loan insurance (like the type you get on a cc). what would that have cost him? an extra 50 bucks?

I would have no problem with requiring life insurance on a loan. I have an interest in this topic brcause I speak as a parent of a freshman and a high school senior. DH and I have/will consign loans. But we have figured our finances that we could make the payments if needed.