A mother is responsible for her deceased son’s $31,000 student loan

Lynda Swearingen’s son Zachary died after a bad fall in January 2020. He was just 28.

INDIANAPOLIS — Parents co-sign student loans to help their children borrow money for college. A mother has been told she was responsible for her son’s debt after he unexpectedly died at a young age.

Lynda Swearingen’s son, Zachary, was born on his mother’s 50th birthday.

“It was a good day,” Lynda said softly.

Zachary was one of four boys and the entertainer in the family.

“Since childhood, [he was] really talented. But I didn’t really know how talented I was until so many years later,” Lynda said.

After high school, Zachary studied photography at the Milwaukee Institute of Art and Design.

Lynda, a nurse and lactation consultant, did her best to help pay.

“The conversations were, ‘You guys, I can’t afford your tuition, I can’t. But I’m going to co-sign your student loans.'”

So she co-signed the loans – only thinking about it after the worst day of her life.

In January 2020, Zach passed away after a bad fall at the age of 28.

“The doctor just came out and he just said, ‘I’m so sorry. His injuries were too bad. He passed away about 10 minutes ago,'” Lynda said tearfully. you know, that’s just not the case. [You] love them so much, and you never think anything like this is going to happen.”

As Lynda grieved, she got Zachary’s affairs in order, including his student loans.

She said her private loans with Sallie Mae have been cancelled.

Then she contacted Elements Financial, a consumer-owned credit union, about her other student loan.

While the Indianapolis-based lender agreed to waive interest on the loan, they told Lynda she still owed the balance – just under $31,000.

“When we co-sign, it means if he’s having trouble paying, I’ll help him. Not if he dies, I’ll pay for it all,” she said.

As for student loans, federal loans are canceled after death. But for private lending, it’s a gray area.

A law on the books says, in part, that private loan co-signers should be released after a student dies.

But Elements Financial initially rejected Lynda’s pardon application for two reasons.

First, the deal was made before the November 2018 law came into effect. Second reason, the borrowed money was an open line of credit despite it being called a student loan.

The law excludes open lines of credit, even if the documents indicate that the funds are paid directly to the school.

“If someone is having a hardship in their life and they can’t afford their house or their car, then [the lender] can take the house and they can take the car and people can find another place to live,” Lynda said. “There is nothing tangible to take.

If you are a co-signer of a private student loan contracted before November 2018, take the steps to withdraw it.

Anna Helhoski with Nerdwallet said to remove your name, you’ll need to see if your private lender offers a co-signer release.

“Call your private lender and find out if it’s something that’s even available to you,” Helhoski said.

Helhoski said if the lender doesn’t offer it, there are other options.

“Consider asking the primary borrower, most likely your student if you’re a parent, to check with other lenders you can refinance with that offer a cosigner release,” Helhoski said.

Unlike a residential mortgage, there is no cost to refinance student loans. However, your last resort may be a life insurance policy.

As for Lynda, she finally received good news.

After her years of perseverance and contact with 13News, Elements Financial contacted Lynda to let her know that the student loan would be canceled and that they were changing their student loan policy regarding death in the future.

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