Ella Edwards’ only son Jermaine died three years ago, when he was just 24 years old. And Edwards, 61, is stuck paying back her son’s student loan debt. As if dealing with the untimely death of her son and suddenly finding herself responsible for the care of her young grandson wasn’t hard enough, she also has this financial burden.
Edwards said she was happy to cosign her son’s loans to help him build a better life for himself, but that she had no idea she would be held responsible if he died before repaying them. His two federal loans were discharged immediately, but the holders of his third loan, American Education Services (AES) and National Collegiate Trust (NCT), continued to hound Edwards for the over $10,000 her son had borrowed from them. For once, in comparison to this private borrower mess, the federal student loan system looks compassionate and reasonable.
Edwards started a change.org petition to convince the private loan company to stop hounding her, and to change the laws about what happens to student loans when the borrower dies.
“I’m horrified at your institution’s practice of hounding a dead student’s family for repayment of student loans he’ll never get a chance to use,” the letter in the petition reads. "I'm calling on you to do the only humane thing — let this still-grieving mother mourn the loss of her only son in peace. I stand with the Ella Edwards family and decent people everywhere in demanding that you discharge Jermaine Edwards' student loan debt today."
So far, the petition has over 200,000 signatures, with pages and pages of statements of support for Edwards and outrage at the loan company.
“It's not like he just walked away from the responsibility,” wrote one signator, on the fact that Edwards had cosigned her son’s loan, but that this isn’t the type of situation guarantors envision when they agree to sign on.
Unfortunately, Edwards’ story is not an anomaly. In June, ProPublica published a story about a man named Francisco Reynoso who began getting harassing phone calls from debtors a few months after his son Freddy died in a car accident.
"They would say, 'We don't care what happened with your son, you have to pay us,'" Reynoso is quoted as saying.
This is a common enough predicament that Deanne Loonin, an attorney with the National Consumer Law Center and director of its Student Loan Borrower Assistance Project in Boston, made a statement recommending that people who have private student loans buy life insurance policies, even if they’re young and in good health with no dependents.
As if it weren’t bad enough for parents to be saddled with their dead children’s debts, Loonin added that in some cases the death of a borrower will be viewed by the lender as a default, causing the entire balance to be due in full, immediately.
I know there are moral hazard cases to be made against student loan forgiveness in general, but I hope even the hardest hearted fiscal Conservative will see that this is situation is absurd and should be changed.
With other types of loans like a business loan or a mortgage that live on when the borrower dies, the relatives inherit an asset along with the debt, and can live in or sell the house, and run or sell the business.
But with student loan debt, the investment is in the person, and when the person dies, the investment and anything that could have come from it dies with them. There is nothing to be inherited by a student loan borrower’s family other than grief and debt.