It's an old old story. Someone co-signs for a loan thinking its just a formality but then gets stuck paying for it. It's very common with student loans and defaults have become epidemic these days. In this case, the people's daughter died at 27 leaving them with $200k to pay off. It's a private loan, not a federal one. They say it should be forgiven if the payee died. Apparently they never heard of LIFE INSURANCE.

California couple struggling after being forced to pay deceased daughter�s student loans
Published August 05, 2014
FoxNews.com

A California couple is speaking out after they say their finances have been devastated over their daughter�s student loan debt, which they are being forced to repay after the woman died unexpectedly four years ago.

Steve and Darnelle Mason�s 27-year-old daughter Lisa died suddenly from a liver disease, leaving behind three children. Darnelle Mason, who is now raising her grandchildren along with her husband, told Fox Business the �excruciating� pain of losing her daughter has only been compounded by the crushing debt.

�She was doing what she really loved to do,� Mason said. �So it is really just a crushing burden.�

Lisa Mason had taken out close to $100,000 in student loans in order to pay for nursing school, and was making payments on the debt when she died. Steve Mason said he and his wife, who had co-signed the loans, were contacted immediately after his daughter�s death and were told they must start making payments.

�We knew if she didn�t pay her debt we would be responsible by co-signing, but we didn�t know that if she died the debt would fall to us,� he said.

Mason said his daughter�s debt has ballooned to $200,000 and the payments exceed $2,000 a month.

Mason, who is a minister, said some of the lenders have given them breaks, such as lowering their interest rate, and one loan was forgiven. However, he said the debt has still been �financially devastating� and wrecked their once-solid credit.

Mason said he believes private student loans should be regulated the same as federal student loans, and should be able to be forgiven if the borrower dies. He also said he believes student loans should be able to be discharged in bankruptcy, like other types of debt.

�There needs to be some relief,� he said.

Always read the fine print before signing. I feel for them, but that's the responsibility of a co-signer.

you would think folks would be more mindful of chit like this.

Accountability sucks, but it is right.

Some ministers hate to actually have to pay for something.

they really should have thought about that scenario before they signed up for 100k in loans. and why would someone advise their daughter to get 100k in private loans to go to nursing school? i know kids that are doing it now with a combo of community college and state schools for less than half of that. i feel for their loss but they really made their own problems here and are now expecting someone to bail them out.

i grew up with depression-era parents. they drummed it into my head to NEVER cosign a loan for ANYBODY and this was before i even knew what the term cosigning meant.

it saddens me to think that future generations of kids are being raised by people with no financial common sense. it does not bode well for the future of our country.

First

Then


Makes sense

AMEN!

Why didn't they buy life insurance on their daughter?

Where is the father of the children that were left?

I manage a group of collectors that do nothing but private student loans for a living, so I can speak to this professionally.

If everything in that story is true (which I'm certain it's not), those two people are a couple of world class retards.

Made this big mistake 20 years ago with my BIL. NEVER again !!!

That's what I was thinking. I had to take a test for my student loan so I would understand what happens if I don't repay the loan. If I die my loan dies with me.

Of course, no one had to co-sign my student loan.

If I had kids I would go to a financial adviser to find out about a big honking life insurance policy to pay off the loan.

What do you guys say when an in-law asks to co-sign a loan ?

Last time I just said NO ! ... but they always get mad about it.

My Daughter is finishing up her masters and my Son in law is doing nursing school.

No loans and they both have had jobs and worked their butts off to do it.

Proud of them,i am.

Well I felt that "my job as a parent was to PAY for my two kids college degrees". So I cosigned, I paid off and went about my business. Told them at the beginning anything after a 4 year degree was on them. Worked fine here.

These folks are just trying to maintain a lifestyle and get out of paying the bill.

My guess is that this woman married, had 3 kids, divorced, then went to school to learn to support herself. These days, becoming an RN requires a BS degree. It's no longer a 2 year program. My son is an RN and has some pretty high loan bills from U of WA. He already had his BS, though, and got the nursing degree in only 2 more years. His wife supported them so his bills are strictly school bills, not room and board.
Many JC's have 2 year pre-nursing programs to get through the 1st 2 year at a very low cost. Our local JC has a 4 year program through another state college. The kids get the BS without bankrupting themselves, certainly nowhere near $100k.

Being a parent also means telling them what you can afford and what you can't. Many parents let their kids tell them what's going to happen. We gave my son some money for his education but he also worked. His student loan was so small it was paid off in a year. Much better idea. Plus if they have to work they don't have as much time to party and take things a little more seriously. I just don't believe wise parents allow their kids to get in that kind of debt. Most will struggle to ever get out of debt, add a house and their life is nothing more than working to pay the bills if they can ever afford a house.

oldest boy dug himself a bit of a hole with the college thing and living "independently" now he's back home trying to dig his way out.


am thinking the worst of it is listening to his lil brother chime in fairly often "you doofus why are you incurring debt to go to school? You ever look around and see how much stuff our parents have?"

freakin kids

we put money aside to help with our kids education (should they choose to continue their education) you make a B or better in a class, we pick up the tab, anything less than a B, well it's on them.

When they were both in elementary school we set aside 5,000 in bonds for both.

When they got out of high School it was theirs to do with what they wanted.
My Son went into the Navy and used his to set up his household.
The Daughter used hers to go to school.
She still has about 2,000 left and is holding them for later.
That kid has a head on her shoulders.
While he is going to nursing school he is also working at the Hospital and both look after their Son.

Could not be Prouder,they had a plan and are working to see it fulfilled.

Seriously, I have no inlaws or outlaws that would ever dare ask me to co-sign a loan.

DD - consider yourself lucky. My BIL is the bain of my life.

It's not so much as lucky as I'm a cranky, grumpy, son-of-a gun.

Unsecured loan. The bank can go fish if the parents don't pay.

Everyone should read up on student load debt before co-signing. It's a very different type
of unsecured loan. Just one example --- When the parents reach retirement age, The Bank can
and will start garnishment of the Social Security payment.

Plenty of world class retards around, I see them everyday.

If they need a co-signer it's a sure sign they have bad or weak credit. If the party making the interest is not confident they'll repay the loan I sure ain't confident.

He, being a minister, should have been familiar with the Scripture that advises against being a surety on a loan for another.

The borrower is slave to the lender.

Mickey - now we are getting somewhere. Can you tell me where in Scripture to look. I will point it out next time BIL is looking for a co-signer.

I have a Strong's Concordance. It may take me a while to find it but I'll post it when I do.

Thank you, Sir

Proverbs 17:18

'One who lacks sense gives a pledge and puts up security in the presence of his neighbor.'


Ecclesiastes 5:5 (seems the minister should have read this one)

'It is better that you should not vow than that you should vow and not pay.'

I'd say no as well.......once I stopped laughing.

Anybody who thinks I am living frugally and paying additional principal on my mortgage each month to become debt free so that I can co-sign for their debt is sadly mistaken!!
I would not rule out co-signing a small loan ($5000 or less) for a young person to help them establish credit. My dad co-signed a car loan ($1800 in 1982) for me when I was 17.

thats only on federal backed loans. Private loans can't garnish SS. They could sue you, but they rarely, rarely ever do. Most of the time they write them off. To the tune of 100s of millions every year.

I can't think of a person in the world I'd co-sign a loan for.

Proverbs 22:26

People need to learn that bankers are like the Terminator.

They have no emotion,...you can't reason with them.

Debt is slavery,...in the absolute sense of the word.

,..and,...by the way,..

You're a slave even if you chose not to be.

The government and the Federal Reserve made the decision for you.

http://www.usdebtclock.org/

Another is Proverbs 11:15

Young son once asked me to cosign on a lease agreement. I put about 1/2 second of thought into that response.

I told mine what my Dad told me...get a job, join the service or go to college on your own...

My sons did once.....I laughed at them

They are from Kalifornia. They are used to running up bills and then getting someone else to pay for it. Isn't that the Kalifornia way? Stupid is as stupid does. They should have told her "no" or covered her with a life insurance policy. No sympathy here. kwg

Well we co-signed for some student loans for our son and daughter, but we bought life insurance before we signed.

Scott, that's only because you do not have kids.

All kids need a bit of help getting started in life. Some folks make large gifts of cash to the kids, some folks give them cars, or pay their rent.

We live in a rural community, it is just not possible to be employed without transportation.

We cosigned on vehicles for all the kids. But, we had much say in the vehicle chosen, it definitely was a vehicle we COULD have made the payments on, it absolutely had full coverage.

And the title was in our name as well as the kids, until the note was paid off. The kids knew darned good and well, exactly who would be driving that vehicle if THEY failed to make the payments.

There is simply no way I would co-sign for student loans. A kid can work part time, do work study, get all kinds of student grants, and use Federal loans for school.

It sounds like the deceased student had just as much economic sense as her bereaved parents. It is quite likely she was using her loan money to run her entire life, pay the rent, and feed/clothe her children while she was in school. I have seen many young people make just those choices and live on student loans for six to ten years.

But then they cry when they can no longer maintain student status and have to start paying the loans back.

I co-signed a loan for my son to get a newer car. 3 months later he quit his job and stop making payments. 3 months later I asked to use his car and he gave me his keys. When I gave them back the cars keys where on my ring and he had my old beater keys. Told him the Bank of Dad had repossessed it and when he got All the late payments payed he could have it back! Boy he has mad but drove the old beater and started to look for a job. Some time you have to hit em with the facts of life. I still want to now how told him life was fair! This was about the time he started getting his stuff to gather and turn out to be a great young man and I am very proud of him today. Clint

I was the oldest of 5 children and my Dad was a truck driver. I went to Jr. College and then college. I worked my way thru by working in grocery stores (getting up early and unloading trucks), drilling water wells, building towboats, and finally working at Baxter Labs making and testing IV solutions. I took an 18 hr load and worked 40-60hrs per week. No student debt. My Dad did co-sign for a 1956 Ford @ $225.00. He picked out the car and we went to his banker. I paid it off building towboats in the MS Delta heat. I knew better to miss a payment. He used to swing by the house and take me to unload his truck at Lewis Grocer Co. I was up in the 120 degree trailer and he was on the dock using the pallet jack. I got a work ethic and dinner out of the deal.I won't co-sign for nobody. Just cos the bank gives me a dum dum sucker don't mean I'm stupid.

There's a huge difference between deadbeat relatives and this case where the woman was seriously working to pay if off but died. It was a lapse in her parents common sense that they didn't demand life insurance, though.

I still wouldn't cosign. The kids would either have to pay me directly for a car I bought for them or would give it outright to them.

Thats the sad reality

Love this thread.

As others have mentioned and quoted here, the Bible (Proverbs) is quite clear on standing surety for another. It only cost me 60K$ to see how true it was. Cause,,,,,,surely they will honor their obligation, wont they? Wrong. I let it go past 7 yrs so it's uncollectable even were I to sue and can't write it off on taxes so I'm told due to the duration involved. Twas a 5 yr. deal where I put up money for them to borrow against, thus near interest free to them. In 60 mths, they made exactly one payment.

But, looking back at it I'm thinking I got off cheap compared to what the future might have wrought. In the long run it will cost them dearly and that be fact, already has. As the book of Luke says; He who is faithful in small things is also faithful in much.

As the book of Steelhead said; don't do it or just give it to them and walk away.

I took the middle road, & told each kid I'd match whatever they put up toward a car. So far, so good.

I'm also really kind, & put them on my insurance. They have to pay me cash each month for the amount that (they+their car) have increased my premium. I'd have thrown them to the wolves for insurance, but they (boys from here on out) would pay > 3x as much. Car insurance sure points out one of the down sides of having a penis.

FC

When I worked at a bank, we had loan insurance that we offered to people that were cosigning. I actually did have a dad come in one day after his son died to close out the loan. It was nice that I was able to simply tell him the title would be in the mail.

That is a very understandable position.

There is one advantage to the kid though, if you cosign for their car. They get to establish credit history by paying off the note to the bank. Which can well save them major dollars a few years down the road with better interest rates on a home mortgage.

Something else to consider: some of these loans are open ended. You initially borrow some amount but you can take more as needed up to some limit. Possibly the old folks thought she'd need, say, $20k, and had no clue that it would balloon to 200k before it was over. Also, quite possibly, the woman herself had no clue that she'd be borrowing anywhere near that amount when she started. "Easy" money is hard to resist for someone with no financial experience. Its how Payday Loans gets rich from suckers.

No one cosigned for my first loan, which was actually for a boat. After that a truck. Can't follow why they can't get a loan for themselves.

No one cosigned for my first loan, which was actually for a boat. After that a truck. Can't follow why they can't get a loan for themselves.

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Since the recent mortgage/loan debacle, things have seriously tightened up for borrowers.

For me to be a co-signer the person I'd co-sign for would be in a good enough fiscal situation that they wouldn't need someone to co-sign.

I'm not a banker and hence don't give out loans to friends or family. If someone is in a dire situation I'd give them whatever I could. If someone needed a loan, then they should talk to a bank. If the bank won't trust them with money, I sure as heck wouldn't either.

It's a very insidious system designed to create the current inflationary bubbles in education and student loan debt.

This market bubble is being collateralized by the equity in the parent's homes...that is the current source of wealth the banking predators are currently targeting.

The student loan bubble is just one of the current financial scams, but is similar to the capitalized mortgages a few years ago. If they want to re-package and sell off the loans to Wall Street, and sell them to other suckers, they need some collateral to "back" the securities they are creating.

The loans are intentionally designed to target the equity in co-signers property, just like the previous predatory loans targeted the paper equity in real estate.

Since there is no growth in the commercial sectors of the economy, the only money available has to be basically stolen from equity holders.

The victims were able to walk away from the over-mortgaged homes, but Congress passed laws that prevent the victims from dis-charging educational debt in the future...fancy that!

So educational debt continues to balloon out of control and follow the victims to the grave.

Education has become a mostly worthless investment for most, and can be over-priced to the extreme at best.

The folks who set this up have paid for a lot more lawyers and politicians than the average borrower will be able to, so it's a totally rigged game that can't be beaten.

It's still predatory lending, so I think it's best not to participate in the entire corrupt system.

So why be another one of the victims.

In my kids' cases, they COULD have gotten that first loan without our signatures. But they would have had to go through a high interest finance company.

We all (most of us, anyway) help our kids to get started in life in many different manners. We bought livestock for the kids to raise and sell in their preteen years. They learned responsibility and rewards for work and dedication.

We bought them lambs to raise. Which they sold at butcher time and bought calves.

We bought an old nanny goat which the kids milked and fed their calves each night and morning. They sold the calves and moved on to horses which were sold after being thoroughly gentled and trained.

They purchased school clothes and other teen age necessities, and had down payments for their first cars.

Cosigning for that first note was a way to reward them for the maturity they had each shown as they grew. It saved them each a bunch of money on the loan rates. And it was never at a risk to us, because we could have taken the vehicle back at any time and made the payments if such became a necessity.

My Dad cosigned for my first experience with credit. A car? no! A home? no! A rifle? Yes!

I had already purchased a decent car, for cash. But then the local drugstore had a special close out on Weatherby MK V's. I wanted that sweet MIJ Varmint Master 22-250 with a 26 inch barrel.

I did not really need it, and if it was still there two months later, I could have purchased it for cash. But we figured there was no way it would sit there for two months without selling. And it was a great way to establish a credit report.

Dad signed and I took out a one year note to buy the rifle. But I payed it off within the two months previously stated.

If you are not smart enough to get a free ride scholarship, you may not belong in college. If you you still want to go, then work your way through, keeps you focused on what is important.

I went to school with a kid who's parents found a different way to help him. They bought an old but decent 3 bedroom mobile home on a private lot. He lived there for 4 years while going to school and rented out the other 2 rooms which covered the mortgage. When he graduated, they sold it for as much as they'd paid for it. 4 years of free room is hard to beat.

You would think that a minister would be more responsible.

Of course if they forgive all these loans, who pays for that? Consumers of course so I"m once again supposed to pay for all your mistakes...