I had some. 30 years ago. Paid them off. That's not the point.
The point is, a clause in the loan, if I had bought the farm back when I was 25, the loan went away. The wife would have been on the hook for the house and credit cards and car note, but not the thousands in loans.
When I hear youngins complain about student loans now, they act like if they died the debt would still be outstanding.
Was my experience of a forgiven loan upon death atypical? Or did it go away in the intervening decades, and Millennials with hyphen-studies Masters pass on 200 large bill to their heirs?
Your loan was not atypical for the time.
ReplyDeleteThings changed.
Now if you were to die, your wife inherits the debt.
I'd have to check, but I think that not even liquidating the entire estate at the loan will cancel it.
This is all from a very small number of wealthy people getting advanced degrees then declaring bankruptcy with their real wealth well sheltered. So to stop people who could have gotten the degree out of pocket without loans from skating on those loans, we created a situation where someone who needed the loans cannot escape the debt regardless of circumstance.
Such as your reputable and respected small business college being bought by ever larger conglomerations and losing reputation and respect while you're still getting your degree and finding that it's worthless when you get into the real world with it. And not just you, but former graduates from when it was still respected; but they're one up on you in having experience.
The wife would inherit the debt only if she is a co-signer or guarantor on the loan. Otherwise she doesn't owe and is not liable for it and would not inherit it.
ReplyDeleteNow, the deceased's estate would potentially be liable for it but with a bit of planning and having things held jointly with your spouse the deceased may not even have a reachable estate that can be made liable for student loan debts when death occurs.
It all depends on the loan contract. In order to get a student loan today, they require to know your field of study. Crap fields got crap terms.
ReplyDeleteWhen my son died in 2015, his student loans were forgiven.
ReplyDelete