Co-signing for Student Loans
Student loans live on no matter what the situation. Even when the borrower of a student loan passes away, his or her co-signer or estate is still responsible for paying back the student loan. The Christopher Bryski Student Loan Protection Act, which is a bill sponsored by Senator Frank Lautenberg, Democrat, of New Jersey, seeks to change this. Christopher Bryski was a 25-year-old who went into a vegetative coma for two years and then died after a car accident. As the co-signers on his loan, it has left Christopher’s parents with $44,500 in private student loan debt.
The passing of the legislation would require lenders to include a disclosure in student loan documents explaining what occurs to the loans in the case of the death of the primary borrower.
Other New Laws
In the early part of 2010, other student loan and financial reform legislation was passed. Unfortunately, this legislation did not cover private student loans. It only addressed federal student loans, which are discharged after the death of permanent disability of the student. The legislation does to cover private lenders such as Wells Fargo, Sallie Mae, and Citibank. Without private loans falling under the umbrella, it leaves co-signers, such as parents, left holding the bag. If the Christopher Bryski Student Loan Protection Act passes, it will serve as amendments to the Truth in Lending Act and the Higher Education Act of 1965.
Christopher Bryski Student Loan Protection Act
The House passed its version of the Christopher Bryski Student Loan Protection Act in September 2010. Almost the same version of the bill is in the Senate and expected to pass. While the law does not require private student loan lenders to discharge loans if a student stores or is disabled. What the bill does require is that private lenders spell out the obligation of co-signors if these circumstances occur. The bill that is currently under the review by the Senate puts the Consumer Financial Protection Bureau in charge of handling the issue. After the bill passes through the Senate, it still has to go back through the House for final approval before it is signed into.
According to State Senator Lautenberg, “While the Bryski family struggled to deal with the loss of their son, they were burdened by additional hardships brought on by creditors and lenders. They have shared their story so that other families have the guidance they need to make legal and financial decisions when tragedy strikes.” In the situation with the Bryskis, a power of attorney, may have created a different outcome. The issue the parents had in obtaining one led to the current situation, so another aspect of the new bill is to include information in the student loans’ disclosures that provide for power of attorney information for co-signors as well.
by http://www.creditloan.com
The passing of the legislation would require lenders to include a disclosure in student loan documents explaining what occurs to the loans in the case of the death of the primary borrower.
Other New Laws
In the early part of 2010, other student loan and financial reform legislation was passed. Unfortunately, this legislation did not cover private student loans. It only addressed federal student loans, which are discharged after the death of permanent disability of the student. The legislation does to cover private lenders such as Wells Fargo, Sallie Mae, and Citibank. Without private loans falling under the umbrella, it leaves co-signers, such as parents, left holding the bag. If the Christopher Bryski Student Loan Protection Act passes, it will serve as amendments to the Truth in Lending Act and the Higher Education Act of 1965.
Christopher Bryski Student Loan Protection Act
The House passed its version of the Christopher Bryski Student Loan Protection Act in September 2010. Almost the same version of the bill is in the Senate and expected to pass. While the law does not require private student loan lenders to discharge loans if a student stores or is disabled. What the bill does require is that private lenders spell out the obligation of co-signors if these circumstances occur. The bill that is currently under the review by the Senate puts the Consumer Financial Protection Bureau in charge of handling the issue. After the bill passes through the Senate, it still has to go back through the House for final approval before it is signed into.
According to State Senator Lautenberg, “While the Bryski family struggled to deal with the loss of their son, they were burdened by additional hardships brought on by creditors and lenders. They have shared their story so that other families have the guidance they need to make legal and financial decisions when tragedy strikes.” In the situation with the Bryskis, a power of attorney, may have created a different outcome. The issue the parents had in obtaining one led to the current situation, so another aspect of the new bill is to include information in the student loans’ disclosures that provide for power of attorney information for co-signors as well.
by http://www.creditloan.com
No comments