some students loan debts not even discharged at death/vegetative state: cosigners must pay.

[Hannah Bell]

I mean to be blunt - getting into massive amounts of student loan debt can be a scary thing.

But loan debt is scarier than even I thought, because it turns out that for some loans, death doesn't actually discharge the obligation to pay them off anymore:


In July 2006, 25-year-old Christopher Bryski died.

His private student loans didn't. Mr. Bryski's family in Marlton, N.J., continues to make monthly payments on his loans—the result of a potentially costly loophole in the rules governing student lending.

As the college season nears, throngs of parents and students still are applying for private student loans, long used by students as an alternative to federal loans. But they may be unaware that in cases where the student dies, the co-signers often are obliged to pay off the balance of the loan themselves—a requirement typically not found in federal loans.

http://perdidostreetschool.blogspot.com/2010/08/student-loans-that-continue-to-pay-off.html

[McCamy Taylor]

1. If you co-sign a loan...you co-sign a loan. This is news?

Your grief does not entitle you to unilaterally cancel a contract you have signed.

[Hannah Bell]

3. you may have missed this: "a requirement typically not found in federal loans."

[Hassin Bin Sober]

6. Captain-fucking-obvious was too busy being - - - obvious - - - to notice that piece..

[depakid]

9. It's a cosign provision in a private loan- WTF would anyone expect?

Only an IDIOT would expect a different result.

[AlabamaLibrul]

10. Everyone who didn't understand the provisions of their negative-amortization option ARMs were idiots

too, huh?

[Hannah Bell]

13. yes, the list of "idiots" is long at DU: but basically, the list boils down to:

the poor, the workers, the powerless


powerful rich people, otoh, are clever, intelligent & beautiful.

god i get tired of hearing "democrats" attack their traditional constituency.

[depakid]

14. This is hardly a complicated deal, but since you ask. YES, they were idiots by definition

Only an idiot signs a contract without knowing what their obligations are (or could be)

And to be sure, a considerable proportion of the US population are idiots, which is why the nation needs stronger, more comprehensive and enforceable consumer and financial laws to prevent their exploitation.

Not that idiots are limited to America- check this situation out:

BrisConnections

http://www.couriermail.com.au/business/brisconnections-investors-1m-agony/story-e6freqmx-1225767734011

These people didn't understand their obligations, and thought they were buying something like common stock.

Not to say that I don't feel sorry for them- or that they weren't bilked by some unethical advisor or broker- much like those who bought into ATM's.

[AlabamaLibrul]

16. "and thought they were buying something like common stock." They thought they were buying a HOUSE.

Not a complex financial instrument.

JESUS, "Democrats" are ridiculous. I remember why I don't consider myself in lockstep with the vast majority of Dems these days.

[depakid]

20. Did you bother to read the link?

it's about an idiot who didn't know the difference between the deal he bought into- and common stock which can only zero out and not obligate you to make payments.

There's a reason why it was so cheap.

And again, if you buy into one of the ARM's- you'd better make plans for paying much higher rates than the teaser.

[AlabamaLibrul]

21. Yes, I bothered. It makes no difference when you are bringing up ridiculous ideas. n/t

[depakid]

25. Nothing ridiculous about knowing what your obligations are (or could be) before signing!

Common sense, really.

btw: after this fiasco, the Australian government enacted regulations to make it more certain that people know what they're getting into with these sorts of deals. Probably much better to have banned them outright as a financing scheme (as ought to have occurred with "exotic" mortgage "products" in the US).

[Hannah Bell]

12. actually, the line between private & public isn't so straightforward with student loans.

but of course, it's important to denigrate people who may be less informed than your wonderful self.

denigration is always in season.

[depakid]

18. Cosign for something and when the primary debtor fails to pay- YOU pay

Can't get any simpler than that, can it?

(This is a separate issue from the US's system of financing higher education, which is a major drag on the its economy).

[Hassin Bin Sober]

26. Why is it a separate issue?

Why are people required to resort to private for-profit student loans in the first place? Loans that require co-signers?

Why do I see adds for private student loans every time I turn on the TV?

Probably the same reason you see adds for Medicare Part-whatever.

And the same reason you will see adds for "Insurance to Meet Your Minimum Required Mandate!!!"

because our marker was turned over to the juice-loan guys by the repigs and our sensible Democratic friends.

[Name removed]

5. Deleted message

Message removed by moderator. Click here to review the message board rules.

[tammywammy]

2. This is why it's always important to read loan docs, even if you're a co-signer. n/t

[david13]

4. Response is right. This is no costly loophole. It is an ordinary

concept of co-signing. If they don't pay, you pay. Plain and simple. The signers are jointly and severably liable for the full repayment of the loan.
Ordinary rule of contract law.
dc

[Hannah Bell]

11. "a requirement typically not found in federal loans."

[david13]

28. The journalist doesn't know what they are talking about. It is a

common ordinary condition in any loan, federal, state, local, private, corporate or other. Commitment is commitment. Even if YOU kick the bucket you don't get out of the loan. Your estate is liable for it.
But you don't get out of it if the other signer kicks the bucket. That is the idea of co signing. You are a guarantor that they get paid.
Otherwise, why have you sign? To have you NOT pay? What sense would that make.
A co signer may be a fool with a pen. You just have to be very careful who you co sign for.
dc

[Hannah Bell]

31. stafford loans perkins loans federally-funded. what student loans used to be,

before they "privatized" them.

[AlabamaLibrul]

29. Most people think of co-signing in the terms of a car or home. They die, bank takes it back.

To suggest that a parent or partner should pay for degree of the deceased, who obviously can never use it and can't be taken back by a bank, is 100% insane. Sure, you or I (I make something of a hobby out of reading documents fully) might understand it in the terms of what is actually done, but the for-profit lenders count on the 99% of those who don't.

[Curmudgeoness]

7. Everyone take a lesson here. Co-signing a loan is exactly the same

as taking the loan out yourself. Except you are at a much bigger disadvantage---you are not aware if the payments as made until months later---when they come after you and have already dinged your credit. Just say no.

[AlabamaLibrul]

8. The only unsecured (in theory) loan that can be harassed upon after the debtor is dead. n/t

[Curmudgeoness]

19. Not exactly. If a student loan is not co-signed, death would end the

obligation---if there are no assets. If there is an estate left, all debts are still due out of the estate before other disposition.

[marybourg]

27. Where did you get that idea? If it were true, every elderly person

would take out huge loans which would not have to be repaid after they die. The money could then go to their children. In the real world, any money left by a dead person goes FIRST to re-paying their debts. If there's nothing left, but there was a co-signer . . . well others have made that point.

[inna]

15. Stockholm syndrome seems to be prevalent. Has it always been that way, I wonder.

[marmar]

17. Life in the vulture capitalist state.

nt

[slay]

24. +1

cRapitalism

[Roon]

22. My Grandfather calls co-signers

a fool with a pen.

[slay]

23. Are we going to have to buy enough life insurance to pay our college debts

if we die too soon? This whole debt/insurance shit is looking pretty pretty scam-y these days - not like a way to help people which it should be. :( *slay mumbles something about how a socialist democracy would be so much better and wanders off...

[aikoaiko]

30. In the list of problems with paying for college, this is low on the list.

If you cosign and its in the terms of the private loan, then cosigner beware.

[Wednesdays]

32. K&R

:kick: