Today we are addressing a harrowing news headline that has been making the rounds all over the world: “Grieving parents hit with $200,000 bill for their 27-year-old daughter’s student loans after she died suddenly.” The story comes out of Redlands, California. A local pastor and his wife endured losing their daughter suddenly to liver failure in 2009. Their daughter left behind three small children and over $200,000 in student loans, some with as high as 12% interest rates. While the father did co-sign the loans, he clearly did not expect for anything to happen to his daughter that would leave him holding the entire bill.
This story is a good lesson for all parents who co-sign for their children’s student loans. Parents should consider taking out life insurance policies on their kids, especially if the student loan debt is significant. This is the best preventative measure that can be taken in these circumstances.
If you parents do not take out life insurance policies on their kids before a disaster strikes, then a debt settlement attorney can help on the back end by negotiating with the student loan creditors to get significant reductions in the student loan amounts.
Author: Kevin Fallon McCarthy