topic Re: Right or Wrong? in Community Chat

Right or Wrong?

Kachina624 — Tue, 05 Aug 2014 23:01:21 GMT

Parent co-sign a student loan for their daughter to attend nursing school. Daughter dies unexpectly and now parents are complaining about having to repay her $100,000 loan. They say nobody got any benefit from her education so they shouldn't have to pay. Are they right or wrong?

Re: Right or Wrong?

Tetue — Tue, 05 Aug 2014 23:03:48 GMT

Are they nuts? Some type of life insurance policy on her would have been a smart idea. They are wrong!

Re: Right or Wrong?

NoelSeven — Tue, 05 Aug 2014 23:04:23 GMT

At what point did she die? Did she finish nursing school or not?

Re: Right or Wrong?

gidgetgh — Tue, 05 Aug 2014 23:04:49 GMT

I think we had a thread on this last week. My opinion is that if you co-sign the loan, you're as responsible for the loan as the primary signer. I don't side with the parents on this.

Re: Right or Wrong?

brii — Tue, 05 Aug 2014 23:07:07 GMT

They're responsible for the loan unless there was something written the contract that the loan is void upon the death of the student

Re: Right or Wrong?

tansy — Tue, 05 Aug 2014 23:07:21 GMT

Another valid reason to not consign a loan:/

Re: Right or Wrong?

dooBdoo — Tue, 05 Aug 2014 23:10:02 GMT

It seems to me everyone has to pay attention to all the "what ifs" when they sign legal documents. Here's one article about the family in question (too long to copy and post here):

Grieving parents hit with $200,000 in student loans

Link goes to: http://money.cnn.com/2014/07/28/pf/parents-student-loans/

Re: Right or Wrong?

Puzzle Piece — Tue, 05 Aug 2014 23:10:41 GMT

On 8/5/2014 brii said: They're responsible for the loan unless there was something written the contract that the loan is void upon the death of the student

Ditto.

Re: Right or Wrong?

NoelSeven — Tue, 05 Aug 2014 23:10:45 GMT

On 8/5/2014 gidgetgoeshawaiian said: I think we had a thread on this last week. My opinion is that if you co-sign the loan, you're as responsible for the loan as the primary signer. I don't side with the parents on this.

I agree, although if she never got to step foot in school, it would be nice if they could just return the money.

Re: Right or Wrong?

151949 — Tue, 05 Aug 2014 23:13:10 GMT

$100,000 for nursing school. !!!!????? Where? She could have achieved the same thing at Community college.

My Nursing school student loan was $1400 forty five years ago, but I had a scholarship for my tuition.

Re: Right or Wrong?

Elstongunn — Tue, 05 Aug 2014 23:13:10 GMT

As a co-signer on a loan, you've agreed to pay the loan if something happens to the original signer. It doesn't matter what the reason for the lapse, you're responsible. It doesn't matter if the person finished their schooling or why they didn't finish their schooling. The loan is owed, and if the recipient doesn't pay it back for whatever reason, as the co-signer you are next in line as responsible for payment.

The parents are wrong. They promised to make good on the loan, so they now own it.

Re: Right or Wrong?

gidgetgh — Tue, 05 Aug 2014 23:16:31 GMT

On 8/5/2014 NoelSeven said:
On 8/5/2014 gidgetgoeshawaiian said: I think we had a thread on this last week. My opinion is that if you co-sign the loan, you're as responsible for the loan as the primary signer. I don't side with the parents on this.

I agree, although if she never got to step foot in school, it would be nice if they could just return the money.

But the money is gone. If they had it I'm sure they'd return it and there wouldn't be this problem.

Re: Right or Wrong?

Kachina624 — Tue, 05 Aug 2014 23:20:39 GMT

On 8/5/2014 NoelSeven said:
At what point did she die? Did she finish nursing school or not?

Nothing I can find says whether she finished but they showed what appeared to be a graduation picture and she was 23 years old. Experts say this could have been avoided if she had refinanced the loan to her name only after graduation or if she'd gotten life insurance to cover the loan.

The parents seem to be articulate, educated people. Hard to believe they thought the loan would be canceled upon her death.

shortly before my son died, also unexpectedly, I had co-signed for some extensive dental work for him. I knew I'd have to repay the loan and did so in full within a month of his death. Would you believe this showed up as a negative on my credit report?

Re: Right or Wrong?

dooBdoo — Tue, 05 Aug 2014 23:21:28 GMT

On 8/5/2014 gidgetgoeshawaiian said:
On 8/5/2014 NoelSeven said:
On 8/5/2014 gidgetgoeshawaiian said: I think we had a thread on this last week. My opinion is that if you co-sign the loan, you're as responsible for the loan as the primary signer. I don't side with the parents on this.

I agree, although if she never got to step foot in school, it would be nice if they could just return the money.

But the money is gone. If they had it I'm sure they'd return it and there wouldn't be this problem.

The best I can tell from reading several of the articles, she did attend school. And the debt has increased from $100,000 to $200,000 over time. It's a sad situation.

Re: Right or Wrong?

dooBdoo — Tue, 05 Aug 2014 23:23:33 GMT

According to this article, it's complicated by the fact that this was a private student loan rather than a federal one:

http://consumerist.com/2014/07/29/parents-stuck-with-200k-in-student-loan-debt-after-daughter-dies/

Re: Right or Wrong?

Kachina624 — Tue, 05 Aug 2014 23:25:00 GMT

On 8/5/2014 happy housewife said:
$100,000 for nursing school. !!!!????? Where? She could have achieved the same thing at Community college.

My Nursing school student loan was $1400 forty five years ago, but I had a scholarship for my tuition.

I thought that sounded excessive too. Given her potential earning power, that's an excessive amount of debt. It was foolish for her to take that on. I wonder if the parents could declare bankruptcy?

Re: Right or Wrong?

gidgetgh — Tue, 05 Aug 2014 23:27:59 GMT

On 8/5/2014 kachina624 said:
On 8/5/2014 happy housewife said:
$100,000 for nursing school. !!!!????? Where? She could have achieved the same thing at Community college.

My Nursing school student loan was $1400 forty five years ago, but I had a scholarship for my tuition.

I thought that sounded excessive too. Given her potential earning power, that's an excessive amount of debt. It was foolish for her to take that on. I wonder if the parents could declare bankruptcy?

I don't think that student loans are dischargeable in a bankruptcy. I would assume this would include co-signers.

Re: Right or Wrong?

brewhaha — Tue, 05 Aug 2014 23:28:07 GMT

They should pay.

Re: Right or Wrong?

NoelSeven — Tue, 05 Aug 2014 23:28:57 GMT

On 8/5/2014 happy housewife said:
$100,000 for nursing school. !!!!????? Where? She could have achieved the same thing at Community college.

My Nursing school student loan was $1400 forty five years ago, but I had a scholarship for my tuition.

Not all community colleges teach nursing anymore. And they're 2 year colleges and nursing is now at least four years around here.

Things just aren't the same as they were 45 years ago.

Re: Right or Wrong?

Marienkaefer2 — Tue, 05 Aug 2014 23:30:52 GMT

Well, they were private loans. If they had been federal, maybe the family could have gotten more help with this.

I don't understand why they picked private loans. I also think 100k in loans for nursing school is steep. It would be interesting to.know where she went to school and for how long. Also, why the high amount in private loans? Makes me wonder if she applied for federal student aid, scholarships, grants, etc.

Usually private loans are a very last resort and are supplemental, small increments. We always counseled students not to take these.

They don't sound well off, so I'm questioning their judgment in signing for all of this money, especially in private loans.

Although I feel for the family, the money was used. They need to repay.