One student, during the course of his or her college career, can take out hundreds of thousands of dollars in loans and work for decades paying them off.
This is a pretty standard procedure, and most students expect to graduate in debt. But we never think about what would happen to all that money if we died.
It might seem crazy, especially when you’re in your 20s and think nothing can hurt you, but you should have a plan if the worst ?happens.
Lisa Mason died from ?liver failure when she was 27. She had $100,000 in loans. Suddenly, there was no Lisa Mason to pay for them.
The burden fell to her parents, who had co-signed on her loans as many ?parents do. They didn’t make enough to pay off the bills in time, and the interest rates and late penalties hiked up the price to $200,000.
When the Masons contacted the lenders, they were brushed aside. Because they were private and not federal student loans, the lenders weren’t required to do ?anything.
This kind of insensitivity and lack of understanding is what students expect to face when paying off their debts. But we do not consider that our parents and families will be up against it if we get sick or die.
Very few families would be able to pay their deceased child’s loans without heavy financial consequences.
This is not the first time, nor the last, families have had to deal with collectors’ phone calls in the midst of a death.
One family tried to get $40,000 in loans forgiven after their son was shot to death in 2008. Not only did they have to deal with a murder investigation, but the collectors called constantly and consistently.
Even after the family ?petitioned to have the loans forgiven, the lender did not budge.
Interestingly, after the Masons’ story broke, Navient Corporation, which manages a portion of the Masons’ debt, reduced the interest rates on the loans to zero percent, shrinking the overall cost of the loans by several thousand dollars.
It seems private lenders only display sensitivity when they are called out on the inhumanity of their actions and the treatment of a ?grieving family.
This exploitative behavior is symptomatic of serious problems with the handling of student debt. That lenders can treat their customers and their customers’ ?families this way with little to no repercussion is a ?problem.
Moreover, it means that as students, we need to be careful about loans and where they come from. We need to start actively thinking about the long-term.
When you have your whole life ahead of you, it’s easy to lose sight of the ?distant future. It all seems so far away. But surprises can happen anywhere, at any time.
We can’t know when tragedy will happen, but we can do our best to prepare for it.
We need to recognize that we are not going to live forever, and have a plan in place. That way we can protect what is really important.
