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Should Mom Have to Pay Dead Son's Student Loans?

A Michigan mom wants to be let off the hook for her dead son's student loans and a nationwide petition drive is under way to support her

 

A nationwide petition drive is under way in support of a 61-year-old Michigan woman who is still on the hook for a student loan she co-signed for her son, who died four years ago, according to an ABC News report.

The son had three student loans when he died of natural causes at age 24. Two federal loans were forgiven but a private loan company is still trying to collect its money.

The online petition of mom Ella Edwards has garnered more than 200,000 signatures.

What do you think about the situation? Tell us in the comments section below.

An interested bystander December 04, 2012 at 07:57 PM
Since the majority of student loans are guaranteed by the Federal government, the question is whether the mother is liable for the loan or the taxpayer is. I'm sorry, it's not the taxpayer's responsibility to pay this obligation. I would though be happy to contribute to a charity that pays off loans in situations like this. I don't want my taxes to fund the charity.
careless fills December 04, 2012 at 08:30 PM
After additional research: 1) Federal Stafford and Perkins loans are discharged upon the students death. 2) Federal PLUS (parent) loans are discharged upon students death or upon both (but not one) parents death. 3) Private loans like through Sallie Mae or banks depend only on the lender policy. 4) Disability of student is a bit more complicated, so I will not attempt to summarize. There is some movement in Congress to require public lenders to explain co-signer obligations and insurance options, but it hasn't gone far yet - wasn;t included in the student loan changes in either the Obama care law or the Financial Overhaul law. (so much for the 1800 pages!) And we're not even talking about forgiveness - but only a requirement that lender provide better counselling (which people would probably just sign another sheet of paper and blow it off). See: http://online.wsj.com/article/SB10001424052748704741904575409510529783860.html, which is an excellent article summarizing the status of these needed reforms.
An interested bystander December 04, 2012 at 08:53 PM
Lenders are already required to give the following notice to co-signers in writing, word for word, and in the right size font: You are being asked to guarantee this debt. Think carefully before you do. If the borrower does not pay the debt, you will have to. Be sure you can afford to pay if you have to, and that you want to accept this responsibility. You may have to pay up to the full amount of the debt if the borrower does not pay. You may also have to pay late fees or collection costs, which increase this amount. The creditor can collect this debt from you without first trying to collect from the borrower.* The creditor can use the same collection methods against you that can be used against the borrower, such as suing you, garnishing your wages, etc. If this debt is ever in default, that fact may become a part of your credit record. This notice is not the contract that makes you liable for the debt. http://www.ftc.gov/bcp/edu/pubs/consumer/credit/cre06.shtm Not sure what more counseling will do? If a lender commits fraud, hang them by a yardarm and cover them with honey and fire ants. But it's not the lender's responsibility to forgive legally owed debt nor the taxpayer's to be a charity.
careless fills December 04, 2012 at 09:39 PM
@bystander - that seems simple enuf. but some people will always ignore or think it doesn't pertain to them when the stuff hits the fan. or some may think that all student loans are an exception, when only the federal one are discharged. your point is well taken - the notice is there. thinking people will understand it, but the foolish will think they are being taken advantage of.
Chandler December 05, 2012 at 12:12 AM
A sad thing to lose your child, but yes, she co-signed the loan and she is responsible. The child received the services. She would be responsible for any loan that was signed by her such as a car or a house. However, those could be sold to pay the loan.

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