Grieving Parents Harassed Over Student Loans

Need a reason to rage this morning? Try reading this piece, published by Propublica, about the struggles of Francisco Reynoso, a gardener from California who is trying to navigate the byzantine student loan system in the wake of his son’s death. Reynoso’s son Freddy was a student at the Berklee College of Music and died shortly after his 2008 graduation in a car crash on the way home from a job interview. In the years since, Reynoso has been hounded by student loan companies seeking repayment of the six-figure loans. Unlike Federal loans, which are cancelled in the wake of a student’s death, private loan companies are less apt to forgive a debt, regardless of whether the person who took it on is alive to repay it. What’s more, the actual loan has been sold and resold so many times since Reynoso cosigned for it, that he’s been unable to even determine to what company the money is owed.

[F]or the Reynosos, just figuring out whom to appeal to has been an exercise in futility. Working with a law firm, Francisco Reynoso sent copies of Freddy’s death certificate to any company that sent paperwork about the loans. He remembers being told by at least one company that they’d call him to work out a solution. But no one ever did, he said, and the bills kept coming — each time larger than the last with more interest, more late fees.

“We sent out death certificates to all of them,” said Dolores Orozco-Serrano, a legal administrator with Borowitz & Clark, the bankruptcy law firm handling the Reynosos’ case. Only the federal loan was discharged. “Everyone else was not cooperative at all.”

You don’t need to read Reynoso’s head-shakingly sad story to know that something is wrong here. Student loan debts in the U.S. are now estimated to be more than $867 billion, which is now greater than the total U.S. credit-card debt. This week, Congress will debate whether to allow the interest rates for federally subsidized student loans to jump from 3.4 percent to 6.8 percent on July 1, which could make college infinitely more expensive for students. Whether Reynoso is able to cancel the loans hinges on if he can claim bankruptcy for “undue hardship.” Let’s hope that having this story out in media helps his loan companies rethink their harassment.