Schumer introduces to forgive deceased students’ loan debts
New York Sen. Charles Schumer has proposed a new bill that would require private college loan providers to forgive debts in the case of a student’s death.
The legislation is named “Andrew’s Law” after Andrew Prior, a Northeastern University alumnus who grew up in the city of Syracuse, according to a Feb. 27 article published by The Post-Standard. Prior was killed in a car accident involving a drunk driver on Nov. 13, 2010, months after graduating.
Prior’s parents, David and Rose Prior, were harassed by loan providers about their son’s unpaid student loans. Several companies agreed to forgive the loans, but one continued to seek payment, according to the article. This company threatened to take their car and home away if they did not pay the loans they had co-signed.
Schumer publicly condemned the companies during a trip to Syracuse in February. Since then, all loan providers have forgiven the debt, according to the article.
Kristi Andersen, a political science professor at Syracuse University, said federal loan providers are already required by law to forgive college loans if a student dies. This includes those borrowed by the student’s parents. However, this rule does not yet apply to private loan providers.
This was the problem for the Prior family. The new law would require that private loans be discarded if the student dies, even if the parents had borrowed the loans or co-signed them, according to The Post-Standard. The family would only be required to provide a copy of the death certificate to the company.
“I would think that this law has a good opportunity to pass,” Andersen said. “It seems like a reasonable idea and not something that banks or lenders would want to go on record as opposing.”
Kaye DeVesty, director of financial aid at SU, said in the case of a student death, financial aid department employees try to be sensitive and helpful to the needs of the family. The proposed bill would prevent families from receiving requests to fulfill financial obligations or provide additional details about their child’s death, DeVesty said.
“All federal educational student loans have a provision that the debt will be canceled upon the death of the student,” DeVesty said. “In fact, federal parent loans borrowed by the parent of a student are also canceled upon the death of the student. ‘Andrew’s Law’ will do the same for students who borrow private educational loans where the parents or others co-sign the loan.”
This policy would benefit the families, she said.
Said DeVesty: “It would be a great relief to the parents already trying to cope with tragic circumstances.”
Published on March 6, 2013 at 10:31 pm
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