Steve Mason a Californian pastor has come to find him and his wife being relentlessly hounded by a collection agencies to make good on his deceased daughter outstanding student loans of $200 000.
Crippled by the $2,000 a month in repayments and unable legally to declare bankruptcy to rid himself of the huge debt, the pastor, 59 and his wife Darnelle have reached their wits end.
Each time they have appealed to the lenders to beg for help, the couple have been told that the only solution is to repay their daughter, Lisa Mason‘s debts, some of which have interest rates of 12 percent is to pay in full.
The debt came to fall on Lisa’s parents after Steve personally guaranteed his daughter’s then $100 000 student loans, which allowed her debtors to seek remedy against the family when Lisa Mason came to die of sudden liver failure in 2009. The loans had been made in lieu of the daughter to attend nursing school.
Adding woe to the situation is the fact that the couple are now also guardians of daughter Lisa’s three children, ages nine, 12 and 14, leaving their futures in the balance.
In the five years since hid daughter’s passing, Steve and Darnelle’s inability to keep up with the payments has seen the sum owed double to $200,000 because of high interest rates and late-fee penalties.
Complicating matters, is the fact that Steve Mason makes less than $75,000 a year at Oasis Church in Redlands, California whilst Darnelle earns less in her role as director at the same church.
‘It’s just impossible on a pastor’s salary raising three kids to pay $2,000 a month on loans,’ said Mason to CNN Money, claiming that he is now searching for a second job.
Making matters more tenuous is the fact that had the outstanding loans been federal student loans, then Steve Mason could have appealed to have them wiped or at the very least received a sensible and manageable payment plan. Yet that option does not exist since the student loans are in fact private.
The answer to why Steve is in such dire financial straits is because these are private student loans.
Private lenders are not bound by federal regulations to provide assistance to those in financial difficulty, according to CNN Money, not even when a family member has passed away.
Whilst Steve Mason has called each of the lenders who provided his daughter money and asked for help each have told that while they understand, they are not legally required to help.
Even worse, student loans are the only type of debt that cannot be discharged by declaring bankruptcy.
‘People with other debt from splurging — they can discharge that,’ he said to CNN Money.
‘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.’
That said, one of the lenders, Navient Crop, did reduce Steve’s interest rate to 0% on three of four loans and lowered the amount owed from $35,000 to $27,000.
Told the outlet via CNN Money: ‘We extend our deepest sympathies to the Mason family on the loss of their daughter,’
‘We’re reaching out to Mr. Mason to offer further assistance as appropriate.’
Another of the lenders, American Education Services (AES), who provided the bulk of the loan to Lisa, said that it is merely recouping its money and doesn’t make the law on loan forgiveness.
Steve was told by AES that he would need to speak to the original lender, National Collegiate Trust.
Nevertheless the pastor was told that he was still obliged to repay the outstanding loans.
The situation has forced Lisa Mason’s father to since shelve plans for retirement and because he is bringing up his daughter’s children which he and his wife will be looking after them till his 70th birthday at the very least.
Reiterated Steve Mason: ‘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,’
‘At my stage of life, I should have a very different lifestyle than I do.’
The Masons have started a Change.org petition to allow student loans to be discharged in bankruptcy cases.
And then there was this word of advice from a reader on the web:
If you co-sign for any loan, the person you’re signing for should take out a life insurance policy (for the value of the loan) and name you the beneficiary. Often times, insurance policies are available through the institution that gives the loan, and because the payoff decreases with time, the insurance coverage can also decrease, allowing for very reasonable premiums.