Friday Night Live Scoreboard — Football Scores from Across Iowa

Grieving Parents Hit with $200,000 in Student Loans

When his 27-year old daughter Lisa died suddenly of liver failure five years ago, Steve Mason was as devastated as any father would be.

He and his wife Darnelle immediately took in Lisa’s three children — ages 4, 7 and 9 at the time — even though they knew it would be a huge struggle to support them. Steve earns less than $75,000 per year as a pastor, while Darnelle earns even less as a director at the same church.

Then the student loan bills started coming.

Mason had co-signed on the $100,000 in private student loans that his daughter took out for nursing school, and the lenders wanted their money.

Unable to keep up with the monthly payments on top of all of the other mounting expenses, the $100,000 balance ballooned into $200,000 as a result of late penalties and interest rates of as high as 12%.

“It’s just impossible on a pastor’s salary raising three kids to pay $2,000 a month on loans,” said Mason, who has been searching for a second job.

If these had been federal student loans, Mason could have had the loans discharged or at least received some sort of financial assistance. But since they are private loans, he has little to no recourse.

He called each lender to explain his situation and beg for help, and while they sympathized with him, they told him they weren’t required to do anything.

And they’re right — private lenders aren’t bound by any federal requirements to help borrowers — or co-signers — facing financial hardship, even when it’s a parent whose child has passed away, says Deanne Loonin, an attorney at the National Consumer Law Center. Any loan forgiveness is up to the discretion of an individual lender.

Navient Corp., which manages several of Mason’s loans, said it has reduced the balance and lowered interest rates and payments for Mason in the past, and provides relief to customers on a case-by-case basis.

“We extend our deepest sympathies to the Mason family on the loss of their daughter,” the company said in a statement to CNNMoney. “We’re reaching out to Mr. Mason to offer further assistance as appropriate.”

After being contacted by CNNMoney, Mason said Navient lowered his interest rate to 0% on three of four loans and reduced the total amount owed to $27,000 from nearly $35,000.

American Education Services, which handles the bulk of Mason’s other loans, said as a loan servicer it’s in charge of collecting payments and doesn’t make the rules about forgiveness. Mason would therefore need to contact the original lender, National Collegiate Trust, directly. He did this, and says the lender refused to provide him with any relief. NCT could not be reached for comment.

Mason has considered declaring bankruptcy, but student loans are the only type of debt that generally can’t be discharged through bankruptcy.

“People with other debt from splurging — they can discharge that,” he said. “Student loans should really be the one type of debt they do discharge because it’s done to further an education and career. But somehow getting [my daughter] an education has encumbered me for the rest of my life.”

Similar financial nightmares are haunting other grieving families.

Angela Smith, a mother from Chesapeake, Va., filed a petition on Change.org several years ago asking private loan provider First Marblehead Corp. to forgive the $40,000 in student loans that her husband had co-signed for their son Donte, who was shot to death in 2008.

“Shortly after Donte died, that’s when the collection calls started. It was like a punch in the gut — we didn’t know what hit us,” Smith wrote in the petition. “All of a sudden we not only had to deal with the police and attorneys investigating his murder, but we also had to deal with collectors constantly calling and reminding us of our son’s death in the worst way.”

The petition received more than 150,000 signatures from sympathizers but no action from the lenders. First Marblehead didn’t respond to a request for comment, and Smith says the loan was recently sold to another company.

At least four other petitions from families in this situation have been started on Change.org. There’s been one success story so far, where the brother of a deceased borrower petitioned a bank to stop going after his grieving father for payments, and the loan was forgiven.

Legislation aiming to help people in these situations, including recent bills that would allow student loan debt to be discharged in bankruptcy, have been introduced over the years but have yet to pass in Congress.

For now, the only option parents really have is to propose a payment plan with the lender or try to prove undue financial hardship to the courts in order to get the debts discharged in bankruptcy — which is rarely approved, said Loonin. And for anyone not already in this terrible situation, be very wary of taking out private loans — always try to get as much federal aid as possible first.

As he approaches 60, Mason’s dreams of retirement have been shattered. He’s done the math, and he will have dependent children living under his roof until he is almost 70 years old. He hasn’t taken a vacation with his wife since his daughter died, and doesn’t realistically see that happening for many years to come.

“We’ve pretty much gone through our retirement [funds] already — we didn’t have a lot saved to begin with and now any extra money goes to the kids, as it should, and then whatever we can pay on the loans, we do,” said Mason. “At my stage of life, I should have a very different lifestyle than I do.”

29 comments

  • Marge

    And why do people feel they shouldn’t have to pay back money that has been borrowed because someone has died. I’m in the same boat but never thought I didn’t have to pay. I bet as a pastor of a church he still wants people to donate even though they may be down on their luck. If you don’t want to pay then don’t put your name on the dotted line. All of us seem to end up raising or paying for kids or grandkids nowdays because of some crisis in our lives. Deal with it. I am.

    • Me

      Marge.. you are entirely heartless. Ever heard of the phrase “if you don’t have anything nice to say don’t say it at all”?

      Follow it.

    • Dee

      Many parents today are put in the situation to consign or their child can not go to school. I have plenty of life insurance on my child, but that is of no help as my child is alive. He is struggling to make ends meet, working two jobs, and still behind on his loans. It has effected our credit. The laws need to change. I would have never consigned if not forced to. Some of these young people need to learn some hard lessons, but that should never bring down the parents too. Especially the ones that have had over 30 years of excellent credit. How many lives have to be effected? A student can never walk away from their student loan responsibility, so why do the parents have to come along for the ride?

      • Mary P

        Jeanette, You are missing the point here! Lisa mason was a DRUG ADDICT who caused her own liver failure with extensive, longterm oxycontin use. She was taking 25 oxycontin every single day. Oxycontin is chemically the same as heroin, which she would have known being a nurse. She also then went to work as a critical care nurse and tended to patients while she was gorked out on major pain medications. How many patients died or nearly died because of her drug abuse? How many patients did she steal pain meds from to get high? Then, her father wants to lie and cheat and steal from innocent people because he does not want to have to repay the money he CHOSE to cosign for. THe ccollege she went to only charges $25,000 for the degree she got.The rest of the money went to her for her drug use and so she didn’t have to work while going to school. Lisa worked for two years and was able to make the loan payments, but this father isnt? think about it! He makes 75K per year TAX FREE (preacher salaries are tax exempt). His wife makes 50K. The grandkids get 3K each month in social security and welfare payments to support them, which is also TAX FREE. Their church pays for their house, cars, utilities, and insurance. Where doess all their money go?!

        This man is hiding behind “god” while lying, cheating, and stealing from innocent people. THAT is the point of this story!!

  • Linda

    Again, for the second time just today, people are commenting on a story without a frame of reference or heart or compassion. I just don’t get it. Things can always be worked out, and the almighty dollar doesn’t have to be the bottom line……DEAL WITH THAT!

    • Mary P

      linda,

      If the headline read “DRUG ADDICT DIES OF LIVER FAILURE. FATHER REFUSES TO REPAY DEBT FOR MONEY BORROWED TO PAY FOR DAUGHTER TO NOT WORK WHILE GOING TO COLLEGE AND STILL SUPPORT HER DRUG HABIT. DRUG ADDICT PUT MANY LIVES AT RISK WHILE WORKING AS A CRITICAL CARE NURSE WHILE HIGH ON OXYCONTIN.” would you still be willing to donate to them?!

  • Caleb

    I think the real question is why the hell did someone in nursing school end up with 100k in student loans. Sounds like someone was living off of loans to avoid getting a job.

  • Emily

    I attended a large four-year university and received my bachelor’s degree in Political Science. I then went back a few years later to a small private college and received my BSN. I have a total of 40k in student loan debt, none of which is a private loan. I am also single with no children. My parents did not pay for any of my college. There are a plethora of scholarships and grants for nursing. Especially for students with children. This was a terrible decision made by the family to take out those loans. There would be no possible way to ever pay those back. More research should have been done before signing those loan papers.

  • Dean in Des Moines

    I’m raising 4 kids on less than thirty. Sorry for your loss. Truly I am. But that doesn’t give you the right to lie about this. It is not impossible to raise 3 kids with some income north of 75K.

    Who spends 100K on a degree?!?! That’s foolishness.

    • BrutallyHonest

      I agree! I am also raising 3 children on my own making far less than $75K per year, and i also do not have a 2nd income in my home. I also have to pay my own student loans. I certainly feel sorry for their loss, but is this story just to get someone to feel sorry for them for their financial struggles? i have also had my father co-sign a loan for me, with that loan we also took out a plan, not sure what it was called, but if i were to die, the loan is forgiven and they will not go after my father for the payments. I am sure these two peoples incomes exceeds 100K per year, and being a pastor do you not also get a free house to live in? Also, as far as vacations..boo hoo, so you dont get to take any. It has been well over 20 years since i have been able to take a vacatoin. I cannot remember my mother and father ever taking a real vacatoin, my father didnt retire until the age of 80.

  • John

    OK, I get it that she is deceased and I am sorry for their loss. I wonder, too, why aren’t the kids with their dad? A debt is a debt and unless there is some clause like with credit cards and deceased spouses, guess the debt is owed. A bit off-topic, but I’d like to point out that there are far too many people going to college (partially because in a bad economy, there is nothing else to do but go to school) and a ton of these people are getting loans, aren’t serious students, and either never intend to pay them back, default, or drop out and default. It’s out of control and ridiculous.

  • shelly

    I was widowed at 38 and had 2 children to raise. ( 6 and 11) I am a teacher and have done this for over 30 years. My kids after filling out FAFSA were to have $5000 or less out of family contribution. The Federal assistance did not cover all of Tuition, so each has had to borrow between 40,000-60,000. for their degree. My income would not allow me to be cosigner( I didn’t make enough a year.) They both worked since they were both 16 and used all their savings. Federal loans that say family contribution should be 5,000 does not cover tuition and room and board like many people think. Also Social Security payments for children now stops at 18 or high school graduation.Many people still think it goes on until college graduation

  • Angela Krout

    They should be able to get social security for those kids or child support from the dad where ever he is.

  • Jess

    Uhh….since they say he makes less than $75K, he must be making pretty close to that, which is more than I make after 25 years in my professional career. Plus whatever her income is, they have to be at, or over $100,000. we are raising 2 kids on less than 1/2 that. And I don’t know what church he is with, but, I know our church pays for our priest’s home and car so that is an expense he doesn’t have. Again, I don’t know about his gentleman’s church.
    I really don’t mean to sound heartless. it is very sad about their daughter of course. But, yes, the kids should be getting money from their father and/or Social Security. Good people get into bad situations all the time, not always their own fault. If loan organizations forgave every loan that was going to be difficult to payback, either they would go out of business, or the people who were paying back their loans would be paying them back at huge interest rates.

  • Troy Hendrickson

    When I hear a pastor is making over $74,000 a year (well above the average pay for an Iowan, significantly more than a combat soldier) and his wife takes a nice salary as director of the same church, I find myself having no real sympathy for them. How much has their congregation coughed up to help them?

  • Lawrence Stiner

    If it is necessary to co-sign a loan, it would be prudent for the principle debtor to obtain a life insurance policy for the amount of the loan. This situation is quite tragic and I’m sorry for the family’s loss.

    • do ur job

      Exactly what I was thinking. $20 per month for a term life policy would have eased their discontent.

  • Andrew

    Why would someone not get life insurance to back up their student loans? That’s like taking a $200,000 car off the lot without insuring it. It’s irresponsible.

  • Garren Bugh

    This is a tragic story. It seems to me that all could have been saved with a Life Insurance policy. Most likely, Lisa (or her parents on her behalf) could have taken a policy to cover the loans and have money to raise the kids for around $15/mo. Any large loan should be covered by a Life Insurance policy when someone else is on the hook for the balance if someone dies. Personally, for me to co-sign on any loan for someone (even my children) I would require them to have a Life Insurance policy in place.

  • AmyD

    I wonder how much “free” money they will get from donations of people feeling sorry for them now. Three kids at the age of 27 with no father in the picture…seems odd.

  • bensira

    No doubt everyone can sympathize with the loss of a daughter but a) where is the children’s father, b) why no term insurance policy, c) why didn’t he realize what a cosign meant, d) $1000,000 to become a nurse? e) how is this minister having a difficult time while bringing in a salary of over $100,000, f) Isn’t he living rent free in a house owned by the church, g) sounds like a cheap shot to get crowd funding to pay off the debt.

  • CAM

    I think they should repay the debt. Not because of the money they make (some people are using their income solely as argument, as if people making less should somehow be treated differently). 1: 100k+ for nursing school? , 2. They KNEW their daughter as an addict. 3. They knowingly scammed the system by using private loans to gain access to 100k+ in monies (that’s why they did not use the feds), 4. They also have a pending lawsuit over their daughter’s death, blaming the doctor, and they stand to make money over it; use it to pay the loans. 5.Just as the doctor, they also contributed to their daughter’s death; you don’t help an addict take out huge “education” loans.

  • Will

    First let me say it is a sad story and in brief here is my understanding; Lisa Mason the 27 year old daughter of Pastor Steve Mason and his wife Darnelle died from liver failure due to drug abuse in 2009. I did a simple “Google” search and discovered that according to the Albuquerque Journal (June 2011), Ms. Mason (per her family) had a long history of drug abuse and the family was currently suing the Doctor (Barry Maron) who they say had prescribed her more than 400 pills in a two week period (note; I could find nothing further on the lawsuit).

    The family, after the death of Ms. Mason, is on the hook for more than 100,000. in private student loans that they co-signed for while she attended school. Since her death the family admits they have paid nothing to the lenders although they admit the have an income in excess of 75,000,00 a year. The family states they cannot pay on the loan because they are, as grandparents, raising the three children Ms. Mason had given birth to. I am sensitive to this and wonder if the three children are receiving SSI benefits as they are eligible until they reach legal age and what the contribution from child support from the children’s father is. CNN / Money has reported that the lenders have reduced the principal of the loans to 27,000.00 and has lowered the interest rate to 0% on three of the four loans. Sen. Warren has been talking this case up and the family, as you can see below, has started a “go fund me” campaign where they have raised over 20,000.00 so far.

    My point here is . . . . . I am a nice guy. But . . . . wow. After my divorce (’10) I was left with a horrendous debt (some of which I was not aware of) and since ’11 have struggled finding decent work. I am unemployed as I write this and was just informed by Applebee’s that I was not selected for a position. I am not currently behind with child support for my three children from my first marriage, but soon (next month) will be and the State of Michigan will put this on my credit report and it will stay on that report for seven years. When your degree (B.S. Corrections and Juvenile Services) and work history is in working with children having that on your credit report really does not sit well with organizations that hire. Right or wrong, it makes me look like a deadbeat father, I know that. What I am trying to communicate is that I understand how such things can damage your credit rating – honestly, I do.

    I know many of the folks on my facebook “friends” list are struggling and they are all good people. I guess my struggle with this is that the family understood the risk of co-signing a loan and understood the history of substance abuse by their daughter. The family admits they have not paid on the loans and the lender admits they have even lowered the principal by more than 20,000.00. Finally . . . . the family admits an income in excess of 75,000.00 and a pending lawsuit against the Doctor (Barry Maron) who they say wrongfully gave Ms. Mason the drugs (and to be fair . . . 400+ pain pills in less than two weeks is excessive, IMO) but no mention is made to if the children receive child support or SSI. Although, I understand that if the children receive child support the family does not have to claim that as income for tax purposes. Further as a pastor does Mr. Mason having housing, transportation and insurance provided by his church? I am not being mean with this but being honestly skeptical that if someone does not have to pay rent or transportation cost the income from 75,000.00 plus (which the family admits) sure stretches a ton further. Maybe I could also mention that under IRS publication 517 clergy are pretty well blessed with nearly tax free status (schedule SE, Form 4361) which makes that 75,000.00 plus stretch even further. More ironic to me is that the median income in America for 2014 is only 51,017.00 a year and Pastor Mason already admits he is 23,983.00 above that level; without the benefit tax rules favoring clergy, without addressing if he church pays for his home or transportation, without addressing if the children receive child support, without addressing if the children receive SSI and really without saying what his wife’s income from the church actually is. Yet, somehow Pastor Mason seems to believe others should pay a debt that he willingly co-signed for his daughter even though he as an adult understood the risk of the loan and according to news reports the family acknowledges knowing of the daughters history of drug abuse.

    I just don’t see this as a “need” but a “want”. I get the pastor feeling that this will impact his retirement but far too many of us are worried about simply feeding our children during the next month and don’t have time to think about retirement. I don’t want to be mean or without compassion but seriously. I know what I and my spouse are going through and have gone through and can only shake my head at a Pastor and wife who makes more than 75,000.00 a year asking the public for help and even getting a US Senator to trumpet the cause. Crazy. To be even more callous, I don’t think the story would not have gotten the attention that it has gotten if Ms. Mason were not an attractive white girl and her Mother and Father not such sympathetic figures (really, who wants to think ill about a pastor). Sure, I know I sound calloused and I will accept that but understand according to the Bureau of Labor Statistics there are more than 90 million families, like mine, that are either under employed or unemployed (but no longer counted) that are struggling greatly. The Pastor, I am sure, sees this in his church. Somehow I find struggling to cloth and feed children more pressing then paying back a loan but I imagine we are all different. I am also sure that when bad things have occurred in our lives most of us have not looked to “go fund me” or worked to start a petition to change the situation that we created by our own choices.

    I am all for helping others when needed and have spent my entire career helping others (well, when I was working) even to the detriment of my family but in this case I just don’t see it. I feel bad for the family and send them nothing but my good thoughts and prayers however I don’t see this as a grave injustice or wrong but rather as an opportunity.

    I see far to many folks now using the idea of being a good “reformed Christian” as a means to raise money. I am sure the family are nice people but so too are the millions of Americans who are out of work and simply want to feed the children they have and those families do not have the income or resources this family has nor have most of those families found lending agencies so willing to forgive as much principal debt. I will say that to me we have become too willing to hold out our hands. As I said earlier I was divorced in 2010. My youngest child from that marriage has achondroplasia (a type of dwarfism) and my ex-wife used “go fund me” to pay for a medical trip that she wanted to take from Michigan to Maryland. She was able to raise more than 1,200.00 for this trip. She too considers herself a good Christian and is currently married to a youth minister. The funny thing was that when she took the trip she was receiving full child support (42% of my income), she was working full time, her rent was “controlled” based on income and she had just mislead me on taxes and had gotten a very substantial refund by claiming all three children when our agreement was that I would be claiming two that year (she filed first). But . . . people wanted to be helpful and gave her more than enough and she took our son out to Maryland. The thing is . . . . at that appointment they told her (and I via the telephone); nothing new and the appointment was not an emergency. The doctors recommended no new course of treatment other than to “monitor” his progress via his doctors at the University of Michigan. IOW, it wasn’t a “need” but a “want”. I honestly see the same here with the Mason Family.

    Sorry if I sound callous or mean but frankly the story does not add up IMO. I wish the family nothing but the best but . . . . . having been hoodwinked, bamboozled, led astray in the past I have grown pretty good at identifying things that don’t seem right and IMO that is the Mason Family story.

Comments are closed.

Follow

Get every new post delivered to your Inbox.

Join 894 other followers