These seem to be predatory lending.

Knowing what little I know about my daughter-in-laws parents situation, I'm stunned they could get any kind of loan, let alone something this large.

This suddenly feels like predatory lending on a loan that probably can't be discharged by bankruptcy and death.



In the end my son and DIL are planning to pay every penny back to dad, bank or whomever.
They have the capacity in the future that make that happen and I don't doubt their intent.

no significant underwriting. Banks won't let you buy a car they don't think you can afford - even if it is a very good car much less a used junker. The US Government made them easier to get (by making government direct lender for almost all loans) almost 15 years ago. They idea was to expand access to college and "cut out the middle man" making a profit (and the government could even capture that profit). They made it so easy that people - students and yes, sometimes their parents - unknowingly take on more debt than they ought to have. Stories like this are common. I worked with a woman who went to Northwestern undergrad, University of Florida Law School and Wash U Law School for a law post grad program. She racked up nearly $400K in student loans by her late 20's. 10 years later she still was just over $300K in debt and moved into her parent's basement to live suburban Chicago while working in a corporate legal dept at a company downtown (single so this was possible). Everything had been consolidated like it sounds in your situation so when we last talked she feared she could not get any relief. She admitted that she never gave much thought to the implications of taking on so much debt. It was so easy to get and she wanted to live more like an adult rather than student after college, even when going to law school and beyond.

The government typically blames:

1) The school for "selling" crappy degrees if a for profit. If a non-profit or state school, they never blame them and just assume the price-value-job prospects were properly aligned with the debt assumed.

2) The student

But the biggest problems was that in wanting to expand access to education the US Government enabled people to make bad decisions (and yes allowed some students to be taken advantage of by unscrupulous schools as well as principled schools who gladly took the money and the reduced price pressure).

The states have led the way on demanding that schools do a better job upfront explaining how much this will cost you and what you will have to pay back BEFORE school begins. That is one reason why enrollment has stalled. People have heard the stories, gotten more information and are finally becoming better consumers and enrollment declining at the margins. They are better calibrating the trade-offs vs a job or going PT vs FT. And they are becoming more discriminating about what they study (more vocationally focused, especially if borrowing). This is all good but it didn't happen fast/soon enough it appears for your DIL or her parents.

At this point, if she got a fraudulent degree from a failed school that went out of existence like say ITT Education she may have legal options. If she got a worthwhile degree from a reasonable school but is simply over-leveraged, then the options are very few.

There’s nothing physical to repossess when the borrower defaults. It’s an entirely unsecured loan, which is why rates are high and you cannot discharge the loans in BK.

when the debtor goes to pay back the loan, he/she has already received the benefit of having the loan.

People don't like to pay for something that they aren't currently benefiting from.