Grieving parents hit with $200,000 in student loans

Steve Mason and his wife Darnelle not only took in their daughter’s three children when Lisa Mason passed away, they also inherited her $100,000 student loan bill. 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%.

Steve Mason and his wife Darnelle not only took in their daughter’s three children when Lisa Mason passed away, they also inherited her $100,000 student loan bill. 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%.

NEW YORK — 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.

loans

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 percent.

“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.”

39 comments

    • MamaBear

      I don’t think people want to be cold hearted just practical. $100,000 seems a high price to pay for a nursing degree especially when she was raising three young kids with no mention of a father figure for the kids. Remember 5 years ago is when Obamacare was passed and it was pushed for young kids to go to school with no worries about how to pay for it. I’m just wondering if their daughter or the kids father (s) worked are they getting social security checks for the kids. And most people do not make $75,000+ a year. Things are really hard nowadays for working people. This is just another sad story and people are tired and weary. The parents should not have cosigned for their daughter who was grown enough to make the decision to keep having children with no way to support them. Now the parents and especially the kids are suffering from these bad choices their daughter made in her short life. With him being a pastor he should know there are others who are worse off than him so he won’t get much sympathy or help by telling this story. I hope the kids will turn out alright.

      • jenny

        There isn’t enough information in this story to say why this mother had three children, so you have no right to conjecture and pass judgment on her. Unless you knew her personally, and if so, you’re being tacky in broadcasting this online.

  • Sam

    No sympathy for the pastor from me. Co-signing loans has consequences. Don’t do it and then whine keeping the bargain. They also could have purchased life insurance on the daughter. I guess the over paid pastor believes that God will take care of everything and he only has to whine.

  • Shaft

    how does he have 4,7 and 9 year olds and hes 60 thinking about retirement ??? could it be that religious and pro life thing?

    • Did you read?

      Did you read the article?! His daughter passed away. The 4, 7 and 9 year old were her children.

      • Timmy McFadden

        I read that he co-signed the loan. Where is the Kid’s Dad? They must go to a different church than I do. The bible clearly states that an unmarried woman who fornicates is a sinner in the eyes of the lord.

      • jenny

        Timmy, where does it say this young woman was unmarried?? Quit stirring up something that’s not there.

      • athynz

        “TIMMY MCFADDEN
        I read that he co-signed the loan. Where is the Kid’s Dad? They must go to a different church than I do. The bible clearly states that an unmarried woman who fornicates is a sinner in the eyes of the lord.”

        Timmay where does the story say she is unmarried? You obviously read it enough to know her father cosigned the loans. Now it could be her husband had bad credit, was no longer alive, or she could have been divorced.

    • Tana

      they are the grandparents who took in the kids when the daughter died,,,,do you people even read the stories before you make rude comments??? what would you have them do with their daughters children,,take them to the pound??? i have never seen so many rude comments in my life

  • Timmy McFadden

    He co-signed for the loan, so this is his problem. Did he expect the bank to write it off? Also, do the math. If she was 27 and had a 9 year old, that means she got knocked up when she was 17. Where is the Dad? Great job Grandma and Grandpa.

    • jenny

      Unreal! You guys don’t know the circumstances of this young woman, and you are ready to cast her as an immoral slut who got “knocked up” at 17. What if she was sexually assaulted? What if she made a mistake as a young woman, as WE ALL DO, and did her best to better herself? What if the children’s dad is dead? You know none of the info so stop passing judgment on what you THINK you know by fitting your theories to the facts.

  • momof5

    Nice to see I live in a world of nonjudgemental people! How about having compassion for these people that lost their daughter and during their retirement years they are raising their grandchildren?! Tammy you must be perfect to judge their dead daughter! You are obviously a Christian…NOT

      • athynz

        You are a bitter man aren’t you? She could have been divorced or her husband could have predeceased her. You make the worst possible assumptions over a woman’s behavior – why do you hate women so much Timmay?

    • Tana

      4 years at a decent school,,,,you get what you pay for,,to bad she died before she could use all that great education,,some of the comments here are just mean spirited,,,its a shame your debt has to be someone elses when youre gone,,,she probably had a dead beat ex husband that doesnt support his kids,,gee its hard to worry about life insurance when you have three mouths to feed,,,i know,,,i had 4 the jerk just didnt come home one day,,and i to went to nursing school in the shortest time possible and paid for it for 20 years,,,people need to show a little compassion here,,,hope you arent all claiming to be good christians

      • Sam

        Expecting people to be responsible is not being mean spirited or judgmental. A responsible person will at least have insurance on the balance of the loan, a common practice. If she were single with three children, then additional life insurance to care for them is a must, even if her education takes longer.

  • Timmy McFadden

    No problem. I’ll happily pay taxes while she sits around watching daytime T.V. and eating cornchips…oh wait, she’s dead. I guess that’s what the father is doing. Are they mixed race childen?

    • athynz

      “TIMMY MCFADDEN
      No problem. I’ll happily pay taxes while she sits around watching daytime T.V. and eating cornchips…oh wait, she’s dead. I guess that’s what the father is doing. Are they mixed race childen?”

      This was low even for you Timmay. I’d call you a libpro but I would not want to insult any libpro – or anyone else for that matter – like that. Why do you hate women and children of mixed race? How is all of the bitterness and hate working for you?

  • Klineberry

    $75k on his salary alone before adding his wife’s and that isn’t enough? That’s more than my husband and I make and we are both professionals.

    Parents need to understand that helping their children, especially co-signing a loan, is not something they are required to do and it is ok to say No.

    • athynz

      I’d hate to be your kid and in dire straights… None of us know the situation here and yet quite a few people on here – like that Timmay dude with the woman issues – are making idiotic judgment calls. NO ONE knows the circumstances regarding her husband, and quite frankly if you and your hubby together as professionals makes less than $75/yr you might want to find new jobs… as a tradesman I make 64/yr without OT or side work, my wife makes close to that and yes we are in fact helping our daughter with school costs. If you are living withing your means that’s great – as I’m sure this man and his wife were prior to having 3 young children dumped in their laps along with student loan debt. Some other jackwagons on here made comments about how they should have planned for this – really people? They should have planned for their daughter to die and to have to take care of their grandkids? There are some heartless and judgmental people here – heavy on the mental part.

  • Denise

    I cannot believe some of these comments. Some of you are just cold hearted, unfeeling people and you know who you are!!! I can’t imagine the stress this family is going through right now. The children have lost their mother, the grandparents have lost their beautiful daughter, and they are dealing with a ton of debt while trying to keep the children fed, clothed, educated, comforted and doing the best they can at it. I will definitely be praying for this family; that ALL their needs will be miraculously met and that they will have peace throughout. If I had the money, I would gladly pay that debt in full and send the whole family on a much needed vacation once they feel up to it. May God richly bless these grandparents and give them the strength and wisdom to do what needs to be done for these beautiful children. In Jesus Name, Amen!!

    • Tana

      i was wondering the same Carol,,, i wonder if they even know they can apply,,,not everyone thinks of that when its just kids left,,,and they may NOT be eligible if there is a dead beat dad in the picture who should be supporting them

    • Kate

      I was thinking the same thing. My husband passed away and my 4 children receive $400 a month each. Also, even if the father(s) isn’t/aren’t around they should still be paying child support. I feel for this family. Crappy situation and no one wins.

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