This is an article posted on Yahoo! News. As I read it I found myself growing angrier and angrier with every sentence to the point that I almost thought I might `Hulk Out` at one point. It disturbed me so many different times and on so many different levels that when I was thinking about how I could write about it I foresaw endless citing, cutting and pasting and it moved me to try something I`ve never done or seen done by anyone before, which is to just post the article and chime in like a play by-play. I don`t know how it will turn out but here goes. Here is Mike Black`s play by-play on an article most disturbing.
A New Peril for Older Parents: Student Loans They Co-Signed
By Kelly Greene
Commented on by Mike Black
Cyndee Marcoux already was stretched thin, thanks to the $80,000 in student loans she racked up after getting divorced and going back to school a decade ago. -Whoh…Let`s go ahead and push the pause button right there. I graduated from a pretty expensive school about 10 years ago and I suppose I had some grants but my final tab was around 45 large. This lady has almost double that around the same time, where the hell did she go to shcool? Gucci University? – Her breaking point came in 2010, when her daughter defaulted on student-loan payments of her own.
That’s because Ms. Marcoux, a 53-year-old library administrator in Seekonk, Mass., co-signed for about $55,000 of her daughter’s loans. -obviously this was your first mistake.- When the daughter was unable to keep making payments, Ms. Marcoux was on the hook—a burden that forced her to reshuffle her entire life. To scrape up the extra $550 – That’s a pretty high monthly payment- a month she owed, she sold her house, then took a second job registering emergency-room patients on the weekend overnight shift. “You work your whole life and never pay a bill late,” says Ms. Marcoux. “You don’t ever think your kid isn’t going to pay.” -Pause: Really? I find it very hard to believe a kid capable of screwing their own mother this royally never showed any previous signs. Surely there were tortured pets, eyeballs in jars, Nickleback CD`s or some other hints that you may have, in hind-sight, overlooked.-
Cyndee Marcoux is on the hook for her daughter’s student loan. After years of facing all sorts of financial pressures they never expected, from adult kids moving back home – My parents had a brilliant solution to this problem, they sold the family house and moved into a condo.- to their own parents needing help to retire, -if you need help retiring, you`re not ready to retire.- empty nest parents are struggling with a new headache.
Thinking it was only natural to want to help children and grandchildren -pause; I`m sorry but this entire preface is a farce. Every one of these scenarios are only `natural` to the person making the request because they have been taught over the course of their entitled life that their parents and grandparents sole purpose in life was to service them.- many co-signed student loans. Now, they’re becoming the latest victims of the nation’s mounting problem with student-loan debt, which surpassed the $1 trillion mark last year.
At a growing rate, young graduates who are either out of work or who didn’t land high-paying jobs find themselves unable to pay their loans. When primary borrowers stop paying, co-signers are expected to pick up the tab—and soon find themselves fending off debt collectors. “People are confused about what it means to co-sign – Yeah, let’s just pause there for a second and think about that. Confused about what it means to co-sign? I can’t really think of anything less confusing. Even if the co signer were deaf and the whole scenario played out like an old silent movie I don’t see how anyone could misinterpret what was going on. What else could it possibly mean? – and their ongoing obligation,” says Deanne Loonin, director of the Student Loan Borrower Assistance Project at the National Consumer Law Center, a consumer-advocacy group in Boston. “When they come to understand that they are equally liable, the regrets set in.”
Neither lenders nor regulators track student-loan co-signing, but experts say there are a host of signs pointing to this new burden for parents and grandparents. – It gets boring here for a while so I`ll paraphrase: the problem is getting worse and they have the numbers to prove it. You can now skip the next 2 paragraghs- According to the Federal Reserve Bank of New York, some 2.2 million Americans who were 60 or older owed $43 billion in federal and private student loans at the end of the first quarter this year, up from $15 billion in 2007, just before the financial crisis erupted. The figures include loans made to parents as well as those for which older adults have co-signed.
For those age 65 to 74, education loans amounted to 13% of all installment debt in 2010, the most recent figure available, says the Federal Reserve. In 2007, the last time the survey was conducted, the level was so low that it wasn’t disclosed. And as that debt burden rises, older people are having a tougher time repaying. About 9.5% of loan balances owed by Americans at least 60 years old were at least 90 days delinquent at the end of March, up from 7.4% at the same time five years ago, according to the New York Fed. For 50- to 59-year-olds, the numbers are rising almost identically.
The federal government usually doesn’t require co-signers for the loans it makes to students. – When I went to school I did not need a co-signer. Had I needed one I would have been forced to explore other options such as the military, community college, or (god forbid) a job.- But the weak economy is forcing banks to demand co-signing for the private loans often made to families who already have maxed out on federal loans. -Shame on the banks- All told, more than 90% of private loans had co-signers last year, according to the Consumer Financial Protection Bureau, up from 67% in 2008. -That`s 23% in 2 years.
For co-signers, the consequences of not paying are severe. Defaulted loans show up on their credit reports as if the debt were their own.-This should be obvious- . Even when loans are current, the added debt can make it tougher for co-signers to qualify for mortgage refinancing or other loans. -That`s a little less obvious.- Faced with the question of whether to pay or not, many older people say they see simply no alternative but to dig deep into savings or tap retirement accounts to fulfill their obligations.– a virtue they have not instilled in their children-
Ms. Marcoux, the Massachusetts librarian, says she feels trapped. She co-signed student loans for two of her three children -I don`t like the sound of this…- and both of them are struggling. One, Jocelyn Marcoux, 30, says she has given up on paying back the loans that allowed her to graduate from the University of North Carolina at Charlotte in 2005. An import-export agent for a freight company, she says she struggled to pay for child care and medical expenses for an autoimmune disease she developed. “If I had known the amount of money I would have to pay a month, I wouldn’t have gone,” she says.-The obvious question any reasonable person should be asking themselves right now is, If the daughter were dead, does the mom still have to pay?-
The other, Matthew Marcoux, 27, who sells software for a visual-effects company in Cambridge, Mass., says he’s having a hard time making $850 a month -Oh my god! That is an insane monthly payment. I had about 50 grand in student loans and my payment was $140 a month.- in combined private and federal loan payments.
The younger Ms. Marcoux feels she is taking a calculated risk, because her husband owns their home and she has little savings. -Don`t say it…- “If they sue us, they can’t get anything,” she says. – She said it. No Love, they thought, as did I, that you might say that, that`s why they made your mother co-sign. Now they`re taking it from her!!! –
But her mother sees things differently; -that`s odd- she even moved in with her 83-year-old mother to pare expenses and make payments on Jocelyn’s loans. “I have to,” she says. “I co-signed them.” -I wonder what Christmas will be like this year for the Marcoux family, do you even send a card? Daughter: Soooo…I guess we`re going to Grandma`s house this year? Mom: Errrr…–
It is almost impossible for someone who co-signed a private student loan to escape the debt. A bankruptcy-code change in 2005 made it much tougher for borrowers or co-signers to discharge private student loans in bankruptcy. The main avenue for ending the payments is to prove “undue hardship,” and the hurdles are high, says William Brewer Jr., president of the National Association of Consumer Bankruptcy Attorneys, a trade group in Washington, D.C. “The court can take the position that all you need to do is sell your house,” – “All you need to do” well then, problem solved!!- he says.
In some cases, grandparents are getting pulled into the debt morass too; some of them co-signed when a student’s own parents didn’t qualify to help out. -Huge red flag.– Pam Gerke, a 49-year-old divorced fourth-grade teacher in Davison, Mich., owes $98,000 on her own student loans—too much, she says, for her to co-sign her daughter’s loans for beauty school. So Ms. Gerke’s mother, Darlene Kuhn, did so instead. -NOOOOOO!!! This story cannot end well.-
After the daughter dropped out -Dropped out, are you kidding? Beauty school dropout, never trust a beauty school dropout. Have you learned nothing from Greese?- and quit making the $200-a-month payments on her debt in 2010, the 72-year-old Ms. Kuhn took over. She says she fears her credit rating will fall, so she draws from the $1,400 a month she collects in Social Security—her only income since retiring. “I tried to do a good deed,” she says. Indeed, both Ms. Kuhn and Ms. Gerke say they are bitter about the whole experience. (The daughter declined to return phone messages.) “My mother would rather not eat than not pay her bills,” Ms. Gerke says. “I’m mortified as a mother and a daughter.” – I`m mortified as a human being. I wonder what level of hell in The Inferno this falls under.-
Many financial planners advise older people to avoid co-signing loans if they can, because -It`s fucking studip!!- they could wind up owing money just as they are preparing to retire or are already living on fixed incomes. Experts also warn that unforeseen expenses such as health problems can leave older co-signers unable to pick up the slack when -funny they use WHEN and not IF when speaking about young people these days.- a child or grandchild defaults.
For their part, financial-aid administrators say they are frustrated by their inability to counsel families before they take out private loans with co-signers – Yeah, I`m sure they`re all torn up over it…– and have called on Congress to require private student loans to be certified by colleges, says Justin Draeger, president of the National Association of Student Financial Aid Administrators in Washington, D.C.
“Yes, the schools feel bad,” he says -The schools are totally in bed with the lenders. My school, and by school I mean my personal adviser who was supposed to be looking out for me, kept changing the classes I needed to graduate until I was out of loan money. When the loan money dried up they handed me a diploma. True story.-
But he says part of the issue for schools is trying to get their arms around -the necks of- who’s borrowing and how much. If families aren’t doing it through federal programs, he says, “then aid offices are sometimes left in the dark.”-Yeah, they`re the victim.-
Bob Stinson, 65, retired from his job as a FedEx Corp. plane-maintenance scheduler in 2003. Two years later, he co-signed for the first chunk of about $50,000 in student loans for his daughter Tiffany, a dental assistant with an associate degree. Although Mr. Stinson had stopped working due to degenerative arthritis, he and his wife were enjoying a comfortable retirement at their home outside Michigan City, Miss., he says.
But after getting her bachelor’s degree, Tiffany Stinson had to sidetrack her plans to go to dental school to help her mom recover from serious surgery. She says she stopped making her $1,200 monthly student loan payments when “I couldn’t pay for stuff right then.” She has since resumed making partial payments, but Mr. Stinson says he keeps receiving letters demanding past payments his daughter still hasn’t made. Some threaten legal action—this when a recent surgery for prostate cancer has only increased his own financial burden.
-A little off topic but this isn`t the first time financial crippling medical bills have come up in this article. At the risk of sounding too socialist, crazy high medical bills, along with high student loans are something very few other 1st world countries have…along with gun murders.-
Sure, he says, he knows he is on the loan, but he and wife can “barely survive” on his pension and Social Security because of their medical expenses. “There’s no way I can pay anything,” he says. “I’m at the point where I say, ‘Come and get it. If you can find it, you can have it.’ “ -This guy should have never been allowed to co-sign for anything but birth control for anyone in his gene pool.-
Financial experts say given a whole set of affairs today—the rate school student debt is growing, the state of the economy, and the fact many parents are approaching retirement—the co-signing dilemma is only likely to escalate.
They also worry about a “cascading effect” on the next generation of parents, because one-third of college graduates in the past year are expected to be eligible for a 20-year repayment term.
Some of these future parents could “still be paying back their own student loans when their children start college,” -It used to be rich kids went to college, poor kids go to work. I was lucky to fall into the window when that wasn`t true but sadly, it is obvious those times are back.- says Mark Kantrowitz.
For now, some borrowers are simply working on paying off their debt faster—in part, to help get co-signers off the hook. Valentina Fleer, a 29-year-old opera singer in New York, faithfully has made $864 monthly payments on about $90,000 in private student loans that helped her graduate from Barnard College and Manhattan School of Music in New York .-I`m pretty sure singing opera is not covering all that, singing ain`t the only thing she`s up to.- She says her father co-signed for some of the loans because “it was only way I could get the money.” -bet she says that a lot these days.-
But her parents are Russian immigrants, and Ms. Fleer says she didn’t feel that she or her parents fully understood their commitment when they applied for the loans. -I`m sorry, but again, what else could it possibly mean, really?-
Today, she says, the debt “just hangs over me. I make those payments because I don’t want any backlash hanging over them.”
I actually think that there was more than this but, I`m guessing like you, I`ve heard enough. This just reeked of the cycle of greed, entitlement and ignorance that fueled the mortgage crisis that America has still not recovered from of people thinking they`re entitled to something, the banks are all to happy to lend money that they can never pay back and a system that looks the other way about the whole thing until it`s too late. This story just has the added twist of selfish kids who wouldn`t think twice about screwing their closest relatives in order to get something they felt they were entitled to. There are no victims in this story, as cold as that may sound, everyone either did or should have known better.
Parents, I know it`s hard to say `no` to your children, really I do but the key is to have these conversations about boundaries early and often. If you know that your children are expecting you to pay for their higher education and you are in no position to do so, you need to make that clear as early as possible so your child`s life isn`t torn apart by the idea of working hard and earning an honest living.
Children can accept just about anything; poverty, divorce, abuse, isolationism, and certainly the idea of financial independence and responsibility. The important thing is not to fool them as to where they stand with you. If a person, which your child is believe it or not, wants something bad enough, they will seek it out and pursue it on their own. Just listen to or read any good writer
.
Thank you.
Mike Black 