Friday, November 30, 2012

A Mother Inherits Her Dead Son's Debt, and Asks for Its Cancellation

Foreign students often learn how expensive American tuition is when they consider coming over to the USA to study.  Indeed, as foreign students, they are charged even higher rates.

Many American students have to borrow money in order to attend college and graduate school.  After college is over, they are expected to pay back these loans, little by little, month after month. Sometimes this takes years, and the student is forced to pay back a huge, extra amount of money in the form of "interest."

However, the loan organizations have acquired a terrible reputation.   If a student falls behind in his/her payments, they often harass the student, the student's family and sometimes acquaintances of the student, in an attempt to get their money back.  (This type of harassment if often illegal and the loan organizations or their collection agencies can be sued.)

In the following story, a mother co-signed for a student loan for her son.  This meant that the mother agreed that if the son could not pay the loan back, she would assume responsibility for it.  Then, after the son graduated, unfortunately, at a very young age, the son died.

The mother then became responsible for paying back the son's debts for which she had co-signed (equalling tens of thousands of dollars).  The Federal Government released her from the obligation to pay the debt back (he had taken some loans from the US government), but a private company which gave a large loan to her and her child is expecting their money back.

1)  Do you feel that this private loan company should cancel the debt owed by the dead son?

2)  Some people feel that the mother should have to pay the money back because 1: She co-signed for the loan and 2: The son accepted and used the money. The son spent four years studying at a college with this money. 

Furthermore, this loan organization is a business and they cannot operate unless they receive their loan money back with some interest.  How do you feel about this?

3)  Some people seem to be upset that the Federal Government cancelled the loan payments upon the death of the son.  People point out that the tax dollars of Americans went to pay for her son's tuition, he used that money, and the government should receive the money back.  How do you feel about this?

4)  If you had to take out a massive amount of loan money to pay for your education, would you do it? 

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