More stories are circulating about the haunting efforts of student loan lenders debt collection efforts. From lawsuits stemming from false debt allegations, to holding the families of a deceased borrower accountable, the burden of student loan debt crisis continues to spread. Here are unfortunate stories of several families:
A Young Mother’s Passing
Lisa Mason was the daughter of Pastor Steve Mason and Darnelle Mason. Lisa was a 27 year old mother of three young children, who unexpectedly died of liver failure five years ago. After her passing, her parents took in the children, but would also soon take on the burden of Lisa’s student loan debt.
Having cosigned a private $100,000 loan for Lisa to attend nursing school, her father Steve was viewed as equally liable for the payment of that loan. No longer able to sustain the $2,000 in monthly loan payments while supporting the three children, the loan debt soon doubled to a whopping $200,000 because of late fees and a high interest rate of 12%.
Not only is the family unable to make ends meet, but the fact that these are private loans and not federal, the options for debt relief are limited. The private loan industry isn’t held to any federal requirements to help borrowers, or cosigners, that are facing financial hardship. Unfortunately, many of these private lenders take full advantage of that lack of regulation. Unable to be discharged in bankruptcy, the Mason family is facing some serious road blocks ahead.
Families Filing Petitions
No not that type of petition, but an online petition through Change.org asking for public support in getting their student loan debts reduced or eliminated. The Smith family from Virginia is seeking help with her son’s $40,000 loan after he was tragically shot in 2008.
There are four similar petitions from families in similar situations around the country, only one of which actually resulted in loan forgiveness. However, that isn’t to say we should give up. There is legislation circling the White House that could offer better student loan debt relief to borrowers in nearly all financial hardship situations. The bottom line is that there must be change in this system if we are to avoid an economic downturn for the worse.
Read the full story at: http://money.cnn.com/2014/07/28/pf/parents-student-loans/index.html