New law to clarify cosigning obligations for student loans
12/03/2010
By Credit.com Staff
The Christopher Bryski Student Loan Protection Act, sponsored by New Jersey senator Frank Lautenberg, would require lenders to inform children and parents about what happens to their loan obligations in the event of the student's death, according to a report in The Wall Street Journal. The bill was named after a Rutgers undergrad who died as a result of a brain injury, leaving his parents with $44,500 in private loans to pay.
Federal student loans can be discharged if a student dies or becomes permanently disabled, the report said. However, private lenders are not required to write off the balances in this case. But the new law, if passed, would require clearer descriptions for co-signers in the event of death.
Often, federal student loans will grant greater flexibility for people who are attempting to repay them, including deferments and other allowances.
