Good question, i have no idea. I would think the debt would not have to be paid at all since the person is dead but it is a screwed up world when it comes to money things.
In the case of my own student loan debts, they would have been discharged upon my death. If a parent doesn't sign for or guarantee the loan, there shouldn't be a problem.
Wrong about car, home, and anything that has a Leon against property. Unsecured debt is not collectible from an estate but Leinster stay on properties.
I understand what a lien is and that isn't what I was talking about. The context was if I owe for "property" and no one else is responsible (cosigner etc)....AND there is no lien, and I die, the debt doesn't go to next of kin.
If a person has student loans in their name only....can you even put a lien on a student loan (context remember?)...and they die, the debt doesn't go to the parents, siblings, etc.
My comment was referring to your reference to house(mortgage), car(lien), not student loans. When collateral is placed as security on a loan, those loans are not forgiven at the time of death. The lender can still repossess property as collateral on a loan after borrowers’ death. I don’t know of any loans on “property”..ie, cars, homes, that does not have a “lien” on the property. In effect, the “property” belongs to the lender until the debt is paid...by someone. This someone does not need to be the original borrower, but it has to be paid.
You were correct , student loans cannot be collected from a deceased persons estate...because the loan is not secured by any property. There was never a question about that.
This crossed my mind as well i know these kind of questions pretty well. Just get the hell away from religion and your entire family and start getting therapy immediately. I am in mountains of debt as well but i just try not to think about it right now. The religion and my family were like toxic pressure cookers pushing me to want out.
In the case of my son who died in 2011 at age 23 all his student loans were forgiven which was a big load off of us. we have 2 daughters whom we are also trying to pay off loans for.
There is an advocates office with student loan agencies if you need a go-between.
Do not let them harass you if that's what they're about. If needed, exhaust forbearance and deferments first. Student loans may be discharged in bankruptcy, but only in extreme hardship and a judge has to approve it.
Otherwise, disability discharges are possible, with medical documentation. After three continuous years of a medical disability limiting an individual's prospects of earning a living wage, the student loans are forever discharged, and erased from credit reports. There's a form for this. The student loan agencies don't volunteer this information. You have to inquire about it if you think you meet the criteria. You may need to request to speak to a supervisor or go through the advocate's office. But it is available upon request.
There's also an income sensitivity repayment program that will allow people to repay according to their ability. From no payment, to low payment or higher depending on how much they make. At the end of 25 years of being in such a repayment program the loans are forgiven regardless of the outstanding balance remaining.
Keep in mind that outstanding student loan debt that is cancelled at the end of the 20 years (for some plans) or 25 years (for other plans) of income contingent repayment is considred taxable income in the year it is cancelled. With low payments resulting in minimal or zero principal repayment plus compound interest for two decades, the ultimate tax liability could theoretically wind up being higher than the original loan balance. In any event, choosing one of these plans could result in major tax liabilities down the road, so plan accordingly.
Aloysius Wrote: ------------------------------------------------------- > Keep in mind that outstanding student loan debt > that is cancelled at the end of the 20 years (for > some plans) or 25 years (for other plans) of > income contingent repayment is considred taxable > income in the year it is cancelled. With low > payments resulting in minimal or zero principal > repayment plus compound interest for two decades, > the ultimate tax liability could theoretically > wind up being higher than the original loan > balance. In any event, choosing one of these plans > could result in major tax liabilities down the > road, so plan accordingly.
I believe the same happens if a house forecloses, a car gets repossessed, and some other types of debt forgiveness.
However, unlike income contingent repayment debt forgiveness, the same doesn't hold true for a disability hardship. Under the disability waiver, once it's gone it's gone, under the existing laws.
Free Man Wrote: ------------------------------------------------------- > One of the bigger scams these days is the notion > that all kids should go to college, and that > college is a guarantee of big money. > > And then throw easy money at the kids and voila - > over a trillion in student loan debt. > > All of which allows tuition rates to be jacked up. > Tuition doubled in the 5 years my daughter > attended state university. What business can do > that? > > Huge scam and bubble.
Bingo. I put college and the mormon church both in the scam category together.
Sorry, guys -- college isn't a scam. It's a simple, demonstrable fact that people with college degrees make considerably more than those without.
Yes, lots of issues with the way student loans are handled (and collected). Yes, tuition's been rising fast. No, having a degree doesn't "guarantee" anything.
College is not a scam. Going to the expensive private college I attended was among the best decisions I ever made. That said, college is not for everyone. Not all colleges are equal and nobody is guaranteed to be successful and happy just because she or he went to college.
I think that students need to keep their loan amounts in proportion to their expected earnings. I knew one young teacher who had $60K in loans, and that's insane. OTOH, an MBA from a top school or a physician can take out that much and more.
Sixteen years ago, I consolidated my undergrad and grad school debt and wound up with a $57,000 debt (for three degrees). I ended up becoming an overeducated housewife, in part due to my husband's Army career. Happily, we have made repaying the debt a priority and we'll be paid off by September. I was very lucky, though, in that my husband makes good money and is willing to share it with me.
Not everyone is that lucky. :( If I had known I was going to be living this lifestyle, I wouldn't have gone to grad school. But I do have three degrees, so there's that. :D
If (hopefully not!) something happens to your husband, it'll be a lot easier for you to get a job that maintains your current income WITH a grad degree than it would be without one...
Maybe... except I never got a chance to use either of my grad degrees. All of the money I have made since grad school has been from writing or singing. :D My grad degrees are in social work and public health.
I have been trying to save for the future, though, because I know things can change in a heartbeat.
Hopefully you all didn't go to collage (as a college-educated young man wrote on his application at our work), because you mis-read what I said.
I did not say that the concept of college is a scam.
I said,
"One of the bigger scams these days is the notion that all kids should go to college, and that college is a guarantee of big money."
I also promoted the idea that it is a scam for tuition to double in 5 years. You disagree?
I once read the local paper saying tuition would go up 17% that year. Below that article was another saying government aid would increase to help students with increased tuition costs. That is not a scam?
If there was a government program to increase aid for buying shoes, the price of shoes would go up. Then they would pass the "Affordable Shoe Act" to help us buy shoes.