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My Step-Son Killed His Father and His Mom Cosigned His Student Loans

By on November 18, 2015

Question:

Dear Steve,

Step-son that is SSI disabled for 3+ years with Mental Illness, Maternal Mother, My wife, co-signed student loans for him. He is now in Jail for murdering his paternal father and will end up in jail or an institution for the rest of his life.

My step-son’s never paid any of his loan payments only my wife. We are struggling to pay these and am looking for a way for them to be gone. He obviously will never have the ability to pay them for multiple reasons. We have been paying for quite a while and after they applied the interest we are basically back to the original balance of the loan. Are these able to be forgiven? Both are with Sallie Mae, the main one and a Parent Plus loan for a smaller amount. Thanks for your time.

John

Answer:

Dear John,

Unfortunately the Parent Plus loan is a bit complicated. According to the Department of Education a Parent Plus loan is a loan taken out by the parent and is the responsibility of the parent. There are some limited situations when a Parent Plus loan can be discharged.

Here is what the Department of Education has to say on the Parent Plus loan discharge.

“You must repay your parent PLUS loan even if the student doesn’t complete his or her education or can’t find a job related to the program of study, or if you or the student is unhappy with the education. However, the loan may be discharged if the child for whom you borrowed dies, or if you die or become totally and permanently disabled.

We may discharge some or all of your loan in any of these circumstances:

  • The school closed before the student completed the program.
  • The school forged the signature on your promissory note or falsely certified that you were eligible for aid.
  • The loan was falsely certified through identity theft.
  • The student withdrew from school but the school didn’t pay a refund that it owed. Check with the school to see how refund policies apply to federal aid at the school.
  • The loan was discharged in bankruptcy claim. This is not an automatic process—you must prove to the bankruptcy court that repaying the loan would cause undue hardship.

On the other loans that were cosigned, the news is better. It sounds as if the son would qualify for a federal total and permanent disability discharge since he is already classified by SSI.

Here are a number of articles on the disability discharge process.

This is going to take a bit of perseverance and diligence to get the paperwork completed. Hopefully he will be willing to participate in this loan discharge process. Otherwise, you’ll have to provide additional documentation on his incarceration and situation.

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About Steve Rhode

Steve Rhode is the Get Out of Debt Guy and has been helping good people with bad debt problems since 1994. You can learn more about Steve, here.

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