Two grieving families have won battles against private lenders that refused to forgive their dead children’s student loans. In the most recent case, Amanda Greenhalgh’s parents told the Star-Ledger’s Kristen Mueller-Price they were left with $120,000 in student loan debt after her untimely passing at age 24.
Like other parents supporting their kids through college, the Greenhalghs were on the hook for payments after co-signing their daughter’s original $100,000 loan.
Although they petitioned Sallie Mae to discharge the loans, the lender wouldn’t budge until they took their story to the Star-Ledger. It took less than a week before Sallie Mae’s Vice President Tim Hynes phoned the family with good news:
“He’s writing the loan off. The whole thing,” Charles Greenhalgh told the paper. “The guy had such a heart in talking to us. He said, ‘I have three kids myself,’ and I said, ‘You should cherish every day with them.'”
The Greenhalghs were inspired to go public after reading about the family of Rutgers alumnus Christopher Bryski, who spent years fighting Key Bank to forgive about $30,000 in loans he’d incurred in college.
Bryski died in July 2006 after falling 45 feet in an accident two years earlier, Business Insider’s Ashley Lutz reported. With the exception of KeyBank, every creditor forgave the 25-year-old’s debt.
After blasting the bank in the local and national news circuit for years, Key Bank relented last month, agreeing to forgive the remaining balance.
A growing trend
As parents increasingly find themselves tied to their children’s student loans, they’ve assumed more and more of the national student debt load. Americans over the age of 60 owe 4.2 per cent of student loan debt, according to the Federal Reserve Bank of New York – $36 billion in total.
Unlike federal loans, which will discharge debt if the borrower dies before paying in full, private lenders are pretty stingy about the fine print.
Sallie Mae’s unfriendly private loan terms have long garnered criticism from consumer advocate groups, but the lender’s taken strides in recent years to forgive loans if students pass away.
Mark Kantrowitz of Fastweb.com recommends parents petition lenders for a “compassionate review process” if they refuse to budge. If all else fails, like these two families have proven, stirring up support from the public can’t hurt either.