Tuesday, July 29, 2014

SOS! Grieving parents hit with $200,000 bill for daughter's student loans

Sudden: Lisa Mason passed away while she was studying to be a nurse after taking out a $100,000 student loan

A Californian pastor is being mercilessly hounded for $200,000 in student loans he was saddled with when his 27-year-old daughter Lisa died suddenly of liver failure.
Crippled by the $2,000 a month in repayments and unable legally to declare bankruptcy to rid himself of the huge debt, Steve Mason, 59, and his wife Darnelle have reached their wits end.
Each time they have appealed to the lenders to beg for help, the couple have been told that the only solution is to repay the mammoth loans - some of which have interest rates of 12 percent - in full.
Making the situation dramatically worse is the fact that the couple are now the guardians of daughter Lisa's three children, ages nine, 12 and 14, leaving their futures in the balance.
Before her death, Lisa Mason had taken out $100,000 in private student loans to fund her education at nursing school and crucially, Steve had co-signed on them.
In the five years since her tragic passing, Steve and Darnelle's inability to keep up with the payments has seen the sum owed double to $200,000 because of the high interest rates and late-fee penalties.

Compounding the desperation, Steve makes less than $75,000 a year at Oasis Church in Redlands, California and Darnelle earns less in her role as director at the same church.
'It's just impossible on a pastor's salary raising three kids to pay $2,000 a month on loans,' said Mason to CNN Money, claiming that he is now searching for a second job.
The answer to why Steve is in such dire financial straits is because these are private student loans.
Had they been federal student loans, then Steve could have appealed to have them wiped or at the very least received a sensible and manageable payment plan.
However, because these are private loans he has nowhere to turn legally.
Private lenders are not bound by federal regulations to provide assistance to those in financial difficulty, according to CNN Money, not even when a family member has passed away.

To 'forgive' a loan is purely down to the lending firm and Steve told CNN Money that he has called each of the lenders who provided his daughter money and asked for help and they have said that while they understand, they are not legally required to help.
Even worse, student loans are the only type of debt that cannot be discharged by declaring bankruptcy.
'People with other debt from splurging -- they can discharge that,' he said to CNN Money.
'Student loans should really be the one type of debt they do discharge because it's done to further an education and career.
But somehow getting my daughter an education has encumbered me for the rest of my life
One of the lenders, Navient Crop, did reduce Steve's interest rate to 0% on three of four loans and lowered the amount owed from $35,000 to $27,000.
'We extend our deepest sympathies to the Mason family on the loss of their daughter,' the company said in a statement to CNN Money.
'We're reaching out to Mr. Mason to offer further assistance as appropriate.'
Another of the lenders, American Education Services (AES), who provided the bulk of the loan to Lisa, said that it is merely recouping its money and doesn't make the law on loan forgiveness.
Steve was told by AES that he would need to speak to the original lender, National Collegiate Trust.
The pastor did and was told that he had to repay the loans.
Steve has shelved his plans for retirement and because he is bringing up his daughter's children will be looking after them till his 70th birthday, minimum.
He has not taken a vacation with his wife since Lisa's death and feels financially trapped.
'We've pretty much gone through our retirement [funds] already -- we didn't have a lot saved to begin with and now any extra money goes to the kids, as it should, and then whatever we can pay on the loans, we do,' said Mason to CNN Money.
'At my stage of life, I should have a very different lifestyle than I do.'

No comments:

Post a Comment