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Related: Editorials & Other Articles, Issue Forums, Alliance Forums, Region ForumsN.J. Forces Mom to Pay Son's Student Loans: Murder 'Does Not Meet Threshold for Loan Forgiveness'
If this is a duplicate, just let me know and I'll delete.
By Tom Boggioni
July 4, 2016
"Please accept our condolences on your loss,” explained a letter from the Higher Education Student Assistance Authority of New Jersey. “After careful consideration of the information you provided, the authority has determined that your request does not meet the threshold for loan forgiveness. Monthly bill statements will continue to be sent to you.”
That is the response Marcia DeOliveira-Longinetti received when she attempted to get student loan forgiven after her 23-year-old son was murdered last year, reports the New York Times.
Welcome to the world of what bankruptcy attorney Daniel Frischberg calls, “state-sanctioned loan-sharking.”
Like many states, New Jersey administers a student loan program designed to help students further their education in order to join a workforce that puts a premium on a college degree.
Where New Jersey parts ways with the other states is the degree of difficulty in getting out from under onerous loan payments despite extreme poverty, illness and even death.
http://www.alternet.org/economy/nj-forces-mom-pay-sons-student-loans-murder-does-not-meet-threshold-loan-forgiveness
I was gonna post this in GR, but it's anything but a Good Read!
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SickOfTheOnePct
(8,709 posts)then as much as it sucks, I don't see a problem with it.
If it's not, or if the paperwork implies that death=loan forgiveness, then that's wrong.
Spitfire of ATJ
(32,723 posts)
downeastdaniel
(497 posts)Get a very good attorney and fight this, as it sucks big time.
SickOfTheOnePct
(8,709 posts)Had she not co-signed the loan, fine. But she did, and this is pretty standard stuff for co-signers.
ecstatic
(34,958 posts)Because it doesn't seem like it.
SickOfTheOnePct
(8,709 posts)And still expect people to live up to financial obligations that they a) willingly agreed to and b) admit don't cause a hardship.
Just reading posts
(688 posts)
chillfactor
(7,694 posts)that says the mother co-signed the loan.
SickOfTheOnePct
(8,709 posts)Yo_Mama
(8,303 posts)Cosigners are often shocked to find that they are independently liable if the signer doesn't pay. But that's what cosigning is - when you sign, you make yourself liable for the entire repayment if the other party(ies) can't or don't repay the loan.
tonyt53
(5,737 posts)Response to Just reading posts (Reply #2)
Post removed
Just reading posts
(688 posts)
Tell me, how does a simple statement of fact indicate a pathological lack of empathy?
Please explain. I'm all ears.
creeksneakers2
(7,838 posts)Cosigning is a lousy deal for the cosigner. Still, she promised to pay if her son didn't so she's on the hook. You can't blame New Jersey for trying to collect.
shenmue
(38,563 posts)
MousePlayingDaffodil
(748 posts). . . and while I can certainly sympathize with the woman's plight -- I can't think of anything worse this side of Eternity than losing one's own child -- I don't see what the issue is. As I understand it, she co-signed the loan, which means she is considered to have borrowed the money just as much as her late son did. Otherwise, while the debt may have fallen to her son's estate, she wouldn't then be responsible.
There's nothing harsh or unsympathetic going on here.
woolldog
(8,791 posts)and yet all the lenders forgave the debt except the state of New Jersey. They're assholes.
WillowTree
(5,348 posts)OK. I've read the article over twice more and I don't see where it says that. Or anything like it.
Did I miss something?
SickOfTheOnePct
(8,709 posts)It doesn't say whether or not she co-signed for those, and I don't know how federal student loans work.
SickOfTheOnePct
(8,709 posts)It isn't in the linked article.
kag
(4,186 posts)I haven't read the whole article yet, but I'm curious if this decision is appealable to the U.S. Supreme Court. Because while I understand the concept of cosigning, what is obvious is that she can no longer reap the benefits of what she "bought" with the loaned money.
I'm not a lawyer, and I'm sure it's just my sympathy for her showing through (my hubby and I are about to cosign a lease for our kids), but I am curious about the option of appealing this ruling.
SickOfTheOnePct
(8,709 posts)when there is no court case?
kag
(4,186 posts)I should have read the article first. Guess I got lazy.
chillfactor
(7,694 posts)First the mother lost her son to a murderer....and now the mother is responsible for those loans? loan-sharking at its worst. There are no words to describe the Higher Education Student Assistance Authority of New Jersey. How do those idiots sleep at night?
thesquanderer
(12,813 posts)So no matter how much you trust the person you're co-signing with to keep up their payments, it can still fall completely to you over unforeseen circumstances. One could take out a life insurance policy to help mitigate this possibility, but it still doesn't cover all the way things can go wrong. If you co-sign a loan, you have to assume that you may end up responsible for paying it off. That's the way it works, I don't see the issue here.
lostnfound
(17,231 posts)thesquanderer
(12,813 posts)
NJCher
(41,718 posts)It's the way it is structured. There is no accountability. College presidents and even their academic vice presidents often haul half a million bucks a year out (each) in salaries and bonuses. They get free cars, country club memberships, and retirement funds that are funded at double the rate of anyone else.
Very few professors are tenured. Adjuncts teach about 70 per cent of the courses, and while they have a union, they are still not compensated adequately or even close to adequately.
The rich here send their kids to Harvard, Yale, wherever, but the middle and lower income kids have to deal with this system.
They do have many good teachers, due to the proximity to NYC. That's the only positive I can offer.
Someone needs to come in and do a massive overhaul. Christie won't touch it.
Cher
LiberalFighter
(53,544 posts)If someone else was the co-signer then they would be liable. The problem is the interest rates.
Takket
(23,290 posts)Same thing with credit cards. You die with a balance, your family has to pay it.
Cryptoad
(8,254 posts)yeoman6987
(14,449 posts)We had to pay discover out of my moms estate.
WillowTree
(5,348 posts).......the debts must be paid out of the estate before it is settled. That's not the same thing as holding the heirs responsible for paying the debts if either there wasn't an estate or there was, but not with sufficient funds to cover the debts.
Kelvin Mace
(17,469 posts)But the family personally would not be held liable unless they co-signed the loan.
WinkyDink
(51,311 posts)yeoman6987
(14,449 posts)WinkyDink
(51,311 posts)smirkymonkey
(63,221 posts)I don't think that is true in every state. For instance Massachusetts has strict laws about going after the family of the deceased. In this state you can file a claim against the ESTATE of the deceased (you have one year to do so), but I don't believe creditors can actually go after family members to pay the debt out of their own pocket.
You aren't responsible unless you're named on the account.
WillowTree
(5,348 posts)If I died and there were not adequate funds in my estate to pay off any credit card debt that I had outstanding (won't happen, but.......) my heirs would not be legally liable for payment.
Takket
(23,290 posts)Sorry when I said family I basically meant that they are essentially losing out on the money they would have gotten if my credit card didn't need to be paid off. I.E. if my estate is worth a million and I have $400,000 in credit card debt, and I "leave everything to my family", my family is only going to get $600,000, not $1 million
mrmpa
(4,033 posts)unless a family member's name was attached to that credit card, the family is not responsible. We went through that when my Dad died. He had a MasterCard in his name only. The balance was about $1200. When he died they tried to get my Mom to pay. When she wouldn't they came after my oldest brother. He asked whether or not his name or anyone else's name was attached to that card. My Dad's name was the only name.
They were not paid.
Blue_Tires
(57,596 posts)Cryptoad
(8,254 posts)if the signer can not service the debt , the co= signer must. geeez
yurbud
(39,405 posts)
kcr
(15,522 posts)so this is how it's supposed to happen and happens to everyone else who's kid is murdered, bother to read the article? It states right in it there that NJ is being a hard ass about this in a way that other student loan programs aren't.
creeksneakers2
(7,838 posts)kcr
(15,522 posts)Other programs don't do this when people die. It has nothing to do with whether she co-signed or not.
SickOfTheOnePct
(8,709 posts)because she didn't co-sign loans from other states, she co-signed a loan from New Jersey.
kcr
(15,522 posts)Wait, no. I don't think so. Still a shitty thing to do.
Night Watchman
(743 posts)don't do this shit. I'm with you!
AtheistCrusader
(33,982 posts)Don't like it? Don't co-sign.
treestar
(82,383 posts)what legal position the state took.
kcr
(15,522 posts)The fact that while other states choose to forgive loans when these things happen, NJ decided to shill life insurance to students instead. So, basically they let the insurance industry get a pice of the action, and of course how are they going to keep that gravy train going if they go and forgive the loans to those who opted not to get it?
WillowTree
(5,348 posts)JI7
(92,784 posts)to use his college degree to get a better job .
i'm not sure what she can do but maybe people can help out through something like gofundme .
Yo_Mama
(8,303 posts)about the "unfairness", not inability to pay the debt.
Initech
(106,526 posts)
Dems2002
(509 posts)The number of responses here that believe this is completely acceptable because the mom co-signed for the loan are astonishing to me.
1. If you read the article it explains that New Jersey is the only entity who didn't forgive this loan.
2. This loan was for her son to pursue higher education - something that has zero value after his death. Had she co-signed on a house or car loan, she'd be able to sell it.
3. This is our government. What the hell is our government thinking that it is in the state's best interest to pursue payment on this loan?
The fact that democrats think there is nothing wrong here is baffling to me. Higher education should not even require such burdensome loans in the first place. Debt forgiveness in such a situation shouldn't be a question.
Those whi parse this down to legal vs moral are missing so very much...the soul of the democratic party that I believed in. We should be fighting for what is moral. If the decision lacks morality but is legal, public shaming is a terrific way to fix it. We don't have to simply bend over and take it.
onecaliberal
(36,594 posts)Sad and pathetic. Burn the mother fucking ladder after you've reached the top. Comments make me want to vomit.
SammyWinstonJack
(44,302 posts)It sure is.....and that is sickening.
Night Watchman
(743 posts)The citation of strict legalisms by a lot of the posters in this thread is downright disturbing!
Orrex
(66,179 posts)The entire racket is a grotesque exploitation of the poor and middle class, a program of indentured servitude designed to saddle its victims with a lifetime of inescapable debt based on misrepresentations while driving up tuition costs at many times the rate of inflation. Student loans should be dischargeable via bankruptcy like any other loan.
Tragic though this current case is, the cosigner of a loan is explicitly responsible for the balance in the event of the borrower's failure to pay, whether due to financial hardship or death.
IMO New Jersey should forgive this loan, but the state is under no obligation to do so, given the terms of the contract. It's shitty and monstrous and cruel, and it's exactly what she signed up for.
Yo_Mama
(8,303 posts)to go BK to dump the student loan. I'm older - I remember that.
It's easy enough - just pile up some debts and then file. Doctors and lawyers were doing this before the law was changed in the 70s.
I think structural solutions to the higher education system in this country are needed - simply making student loans dischargeable in BK is going to benefit all the wrong people.
Orrex
(66,179 posts)In much the same way that businesses can file Chapter 11 and recover more or less unscathed, wealthy student loan borrowers did (and would again) exploit the system for profit rather than for survival.
That might be offset by placing a cap on the dollar amount of student loans that can be discharged via bankruptcy, perhaps the amount that the average borrower incurs. That way a wealthy student can run up $275K in loans and have them wiped clean, but a student from a lower income background could escape $25K that might otherwise follow him for decades.
Alternatively, it the fees and interest could be cleared by bankruptcy while the principal remains intact and subject to repayment.
I must disclaim that this option would work particularly well for me: I borrowed a total of $20K, but after several years of payments went into default due to financial catastrophe during which I lost my job and our house. I came out of default as soon as I was able and have been paying for several years without interruption, and now I owe $19.8K, most of it due to fees and interest.
Incidentally, the soulless abominations at PHEAA were very sympathetic when I tried to plead my case: I told them (truthfully) that I'm the sole earner for a family of four and asked them for repayment options. They answered that I can either pay them $300 per month, or they can take $300 from me each month.
Lots of options...
brentspeak
(18,290 posts)and the investment weasel class. Judging from your comments on this forum, I surmise that you consider those entities to be the "right people"
Yo_Mama
(8,303 posts)The majority of student loans are now advanced by the taxpayer. Not only should they not lose money that's reasonably collectable, if they do, the careers of future students without wealthy families will be put into question, because the repayments of the loans already advanced are circulated back to the new crop of students.
I don't want to see it go back to where only people from wealth can get a higher education.
The income-based repayment plans now available are a means of writing down these balances for many. On many of the loans, at the end of the repayment period a lot of money will be written down.
What I DON'T favor is the system in which students who can repay are allowed to default. The prior poster explained it well, I think.
http://www.finaid.org/loans/repayment.phtml
By any normal method of accounting, the taxpayer will be losing a lot of money on student loans. Here is a CBO 2016 analysis:
https://www.cbo.gov/sites/default/files/51310-2016-03-StudentLoan.pdf
Here's a Forbes article, perhaps more understandable, which discusses the new estimate:
http://www.forbes.com/sites/prestoncooper2/2016/04/10/federal-student-loans-will-cost-taxpayers-170-billion/#10c7b1d15e04
skepticscott
(13,029 posts)are under the impression that this is free money. It's not. When a loan is defaulted (or forgiven) the money eventually comes out of someone else's pocket, as a consequence of the lender having to charge higher interest to other borrowers, or, in this case, higher taxes.
Dems2002
(509 posts)Students and their parents should not have to borrow tens and even hundreds of thousands of dollars for education. This isn't good government, it's debtors' prison. It also cripples our service oriented economy when this money goes to debt service rather than the buying of goods.
skepticscott
(13,029 posts)But the reality is, we don't have that now, and people can't pretend that we do. And frankly, one of the main reasons that colleges have jacked up tuition so much is because they can. Too many students and parents think that college loans are free money, and they borrow as much as someone will give them, to get the most expensive and prestigious education they can, with no concept of how they'll repay if they get something less than a 100K salary, rather than only borrowing what they can reasonably expect to pay back. And surprise, surprise, the cost keeps going up astronomically. Just like medical care.
Simply saying "this shouldn't cost so much" is a silly justification for spending more than you can afford on something that really does cost that much. As is "I want this, and I don't care whether I can afford it or not".
Dems2002
(509 posts)I can easily argue for free college. It makes the most sense for our country. But I can also argue that students and parents don't think that college loans are free money, they think that their child's only chance at success is a college education...and they aren't exactly wrong. You are blaming them rather than blaming the government and public institutions for placing more and more of the burden of a college education onto the backs of students rather than recognizing that this cost is best shared by all for the betterment of our country.
Also, the entire point of borrowing for college is that one is borrowing against anticipated earnings that the college degree is supposed to provide for this individual. It's also true that to a lot of people, $50,000 a year sounds like a hell of a lot of money when one's family is surviving on a lot less. And it's also true that government loans make it feel as though the government supports this course of action as the right thing for an 18-year-old to do.
You also don't seem to understand how the world works if you don't think that the best college one can get into doesn't make a huge difference in future earnings. Jobs are about who you know, not what you know once you reach a certain threshold. I attended a Top 10 university as a first generation college student. It definitely made a difference.
brentspeak
(18,290 posts)but by Wall Street investors who invested in tax free bonds. Or didn't you read the article?
Your propaganda didn't work.
closeupready
(29,503 posts)It's not FDR's Democratic Party any longer; it's a neoliberal haven.
Locrian
(4,523 posts)truly disgusting.
HughBeaumont
(24,461 posts)A groundswell of libertarian "I Gots Mine" rhetoric; it's not pretty if this is what the Democratic party is embracing.
BlancheSplanchnik
(20,219 posts)seem to be missing a fundamental quality of being human.
"Justice" without consideration of compassion in a world of realities is a soulless abstracted world, where collecting money in a questionable business agreement (a system that involves gimmes to insurance companies) is honored, while suffering is meaningless collateral damage.
smirkymonkey
(63,221 posts)Best post on this thread! The lack of empathy on this board is astounding! I sometimes wonder if most of these people are really liberals at all.
Yes, technically, in the state of NJ she is legally on the hook for this, but the fact that so many here don't have any empathy for this family and only care that the greedy state gets it pound of flesh is just disheartening. I expect Republicans to be callous and unfeeling, but it always shocks me when I see so-called Democrats act this way.
Thanks again for your post!
Night Watchman
(743 posts)
SickOfTheOnePct
(8,709 posts)and still believe that she should have to pay back a loan for which she co-signed.
Since when is it "a pound of flesh" to pay back money that you agreed to pay back?
Shrike47
(6,913 posts)In a capitalistic country, lenders aren't philanthropists.
WillowTree
(5,348 posts).......but why should the taxpayers of New Jersey be stuck with the balance on a loan which this woman is 1) legally obligated to pay, 2) has agreed to pay and 3) which she admits won't work a financial hardship on her and her family?
The loss of her son is terribly, terribly sad (even if it was drug related which, if anything, I would think that would only make it more painful for a parent), but I don't see why that should justify shifting her obligation onto others who are in no way responsible for her situation.
Liberal_in_LA
(44,397 posts)
romanic
(2,841 posts)I don't care if the mother is a co-signer, she shouldn't have to pay a loan for her son that isn't alive anymore. It just isn't morally right imo.
Yo_Mama
(8,303 posts)she wouldn't have to repay it.
You are really saying that parents shouldn't be made to cosign for student loans. However, that would sharply increase loan rates, so that would hurt everyone.
She would be in a far, far worse financial position if her son had become ill/disabled and she was trying to help him out AND repaying the student loan.
NJ suggests that the families purchase life insurance for such tragic circumstances. That would have been the way to do it.
Alternatively, the state is purchasing life insurance by covering the unrepaid loans itself, and the cost of the loans goes up for every borrower. It's not like there is some "free" money out there. One way or another, the borrowers pay for all this, whether the loan is forgiven or not.
Cha
(314,980 posts)I hope there's some way it can be forgiven.
Shrek
(4,339 posts)Taxpayers?
The lender(s)?
The school?
ProfessorGAC
(74,787 posts)It's part of the risk assessment. The probability that a principal on a co-signed loan is killed before the loan is repaid is very low. A tiny risk to assume on the part of lenders, who take risks on loans every single minute.
The idea that co-signing is a be-all/end-all is, IMO, misguided.
Most of the time, the cosignatory derives some benefit from the action. In this case, this woman derived zero benefit from the outcome of these funds.
The state and lenders should forgive this loan and quit dancing around a fine point of law.
malthaussen
(18,298 posts)Which I suppose falls under "taxpayers" in a round-about way. But the state could eat the debt, it's not as though it will mean an appreciable hit to their funds. It is rather rare that a 23 year old with student debt be murdered, after all.
brentspeak
(18,290 posts)That is what an investment is all about -- a risk.
treestar
(82,383 posts)Poorly written.
dembotoz
(16,922 posts)lonestarnot
(77,097 posts)dembotoz
(16,922 posts)modestybl
(458 posts)Debtor's prisons next...
Urchin
(248 posts)If you cosign a loan for your kid, you need to have enough life insurance on the kid to be able to use the insurance to pay the loan.
bucolic_frolic
(52,771 posts)For pennies per month, loans could be required legally to carry
life insurance to cover the remaining balance
There's probably a fancy name for it but not only has this women lost
her son, she's lost her son's income stream to help pay off the loan
Seems like a double loss for her
Indydem
(2,642 posts)The guy was a drug dealer, or so say the cops. He wasn't randomly killed, he was targeted for his illegal activities.
This is probably the REAL reason his loan isn't being forgiven, is because he was dealing drugs while borrowing money from the state to do it.
No more than some seem to understand what cosigning a loan means.
NJ's student loan program seems pretty awful, but even in another state it's unlikely the loan would have been forgiven with a cosigner.
xocet
(4,287 posts)That is a far cry from your semi-definitive assertion. They seem not to have said that "he was dealing drugs." One probably should wait until the case is solved to make definitive assertions.
Elizabeth Murray, Free Press Staff Writer
6:52 p.m. EST February 3, 2016
More than a year has passed since a former University of Vermont student was found shot dead inside his Greene Street apartment, and the man’s killing remains unsolved.
Burlington police and federal authorities are still searching for answers in the homicide of Kevin DeOliveira, 23, originally from New Jersey. DeOliveira’s body was found at his Greene Street apartment on Jan. 3, 2015, after family members became concerned when they didn’t hear from him.
Investigation into the case remains ongoing, but authorities have issued few updates since early last year. Burlington police last year said the killing was likely tied to drugs.
“The silence is merely because we don’t need the public’s help at this point,” Burlington police Lt. Shawn Burke said in a recent interview.
...
http://www.burlingtonfreepress.com/story/news/local/2016/02/03/greene-street-homicide-remains-unsolved-after-year/79745756/
Indydem
(2,642 posts)Police "continue to focus on his alleged involvement in dealing drugs."
Of course they are not going to come out and say "this drug dealer got what was coming to him, and we are not going to investigate further."
Except they think the drug dealer got what was coming to him, and they are done investigating.
http://www.wcax.com/story/28142591/police-substantial-progress-in-burlington-murder-investigation
xocet
(4,287 posts)The article from which I took the excerpt is from February 2016.
The article to which you directed me is from February 2015.
Fair enough.
How would one define "involvement in dealing drugs"? Does that extend to purchasing drugs from a drug dealer? If so, that sounds a lot less sinister than what one might infer from what you wrote. Also, what are the "drugs" in this case? Marijuana? Heroin? PCP? LSD? Ecstasy? Oxycontin?
It would seem that all one knows so far is that he was murdered and some form of drugs are involved in some fashion. For all we* know, he may have moved into a house that someone else who is a drug dealer lived in once. He may have been murdered by mistake. That is one possibility. Until the case is solved, it seems premature, arbitrary and deeply cynical to assign blame to the deceased.
*Do you have some other source that would provide the facts of this case? If you do, I stand corrected.
Well?
treestar
(82,383 posts)What process and what standards they use for forgiveness in NJ is what we don't know. But it seems pretty harsh if it ends up like this.
CobaltBlue
(1,122 posts)This experience should no longer be…The American Experience.
WillowTree
(5,348 posts)haele
(14,722 posts)then added a "we just happen to have some life insurance here you should by with that loan because you don't want to be stuck with them if something - occurs - and your kid can't go to college no more" to their new state student loan package.
Sounds as if the young man had to apply for the federal "Direct Plus" loan program because he was going to an out of state university, which racks up a ton of fees if you don't have sufficient scholarships and grants. Under subsidized and unsubsidized Perkins loans the student can be solely responsible and the loan discharged for death, disability, or service waivers (doctor or teacher in a poor community, military service, etc...), but if s/he needs to also apply for a federal Direct Plus loan (because it's going to cost over $5K per semester after all grants and scholarships can be applied), and the student doesn't have an income and is under 24, the parents or guardians are requiredto co-sign the loan.
In this case, that loan might have been the difference between Jr. College and the University of Vermont to that young man.
Normally, the Feds also administer the Direct Plus loans. Here, even though the article was a bit confusing, it looks as thought New Jersey might have taken the program over as a favor to the Feds. And were looking at ways to make some extra money - loan insurance for death and disability is not normally offered.
Haele
Ash_F
(5,861 posts)Blue_Tires
(57,596 posts)at the bare minimum, the state needs to change their law
SickOfTheOnePct
(8,709 posts)Feeling that it's "unfair" that she has to repay a loan that she agreed to repay if her son didn't?
Blue_Tires
(57,596 posts)Or like I said, just change the law to have an accidental death exemption...
Fla_Democrat
(2,618 posts)I don't believe it was ruled an accident. 
ErikJ
(6,335 posts)No other state can collect from Wash st. residents.
SickOfTheOnePct
(8,709 posts)
PatrynXX
(5,668 posts)hey I didn't ask for being Clinically depressed but it's unlikely I'll get out of it anytime soon. they forgave it but messed up my credit. Course if I start making money again they might go after me again. Oh I hope not throw me back into one. Mostly why I'm trying to stay off politics this year now.
TexasBushwhacker
(21,027 posts)If he didn't have a co-signer he probably would have had a higher interest rate.