A death within a family is devastating. Grieving family members deserve time to mourn their loss. But some parents who have co-signed a private student loan for their child have instead found themselves facing harassment from student loan servicers.
After Delphos, Ohio native Andrew Katbi was killed in a tragic car crash just weeks before graduating from law school, his family experienced this mistreatment firsthand.
Upon learning of Andrew’s death, two of his student loan servicers forgave his debt but one, despite having a policy that stated it would forgive loans in the case of death, aggressively pursued Andrew’s mother, who had co-signed for the loans. It took the efforts of Andrew’s sister, Olivia, who began a social media campaign to raise awareness about this practice, to make the servicer abide by its own policy.
It is my hope that all student loan servicers will choose to forgive debt in the case of death but, if they won’t, borrowers and co-signers deserve to know before they sign. Most borrowers and co-signers are unaware that they could be liable for the full value of student loans, even if the borrower or co-signer passes away. To ensure that families can make informed decisions when taking out private student loans, I am joining my Senate colleagues to introduce legislation that would require private student lenders to clearly outline their policy on repayment in the event that a borrower or co-signer dies or becomes severely disabled. In a situation like the Katbis’, these clear disclosures would help borrowers and regulators hold servicers accountable.
To read the full article, click the link below.Making Student Loan Policies Clear for Ohio Students »