I haven’t used her personally, but she comes highly recommended in a group of lawyer moms I’m in. She’s a former attorney who became a financial consultant, and she specializes in helping people manage student loan debt. I believe she offers a free initial consultation.
loan forgiveness being a fair thing. The complexity and confusion about these loans is mindbending.
It convinces me that the banks and financial community conspired with the legislatures and Universities to scam parents and students and leave them in financial ruin. Totally a scam.
At the end of every seven years you must cancel debts. This is how it is to be done: Every creditor shall cancel any loan they have made to a fellow Israelite. They shall not require payment from anyone among their own people, because the LORD’s time for canceling debts has been proclaimed. You may require payment from a foreigner, but you must cancel any debt your fellow Israelite owes you.
However, there need be no poor people among you, for in the land the LORD your God is giving you to possess as your inheritance, he will richly bless you, if only you fully obey the LORD your God and are careful to follow all these commands I am giving you today.
For the LORD your God will bless you as he has promised, and you will lend to many nations but will borrow from none. You will rule over many nations but none will rule over you. If anyone is poor among your fellow Israelites in any of the towns of the land the LORD your God is giving you, do not be hardhearted or tightfisted toward them. Rather, be openhanded and freely lend them whatever they need.
Be careful not to harbor this wicked thought: “The seventh year, the year for canceling debts, is near,” so that you do not show ill will toward the needy among your fellow Israelites and give them nothing. They may then appeal to the LORD against you, and you will be found guilty of sin. Give generously to them and do so without a grudging heart; then because of this the LORD your God will bless you in all your work and in everything you put your hand to. There will always be poor people in the land. Therefore I command you to be openhanded toward your fellow Israelites who are poor and needy in your land.
Program with US government as lender based on the information (not originated as a private student loan with a bank).
Parent Plus under the government are very easy to get. Too easy. I doubt a bank would have made/originated such a loan. This is why the government as direct lender has been such a problem.
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.
It is not her debt (saying what % of her income it would be was weird.) It is a debt against the parents only, they can't come after her for it. Not sure I would get involved. Maybe suggest they talk to a bankruptcy lawyer, in extreme cases parent loans can be discharged/modified in bankruptcy.
This is a issue for her parents, not you in my opinion.
The only way those loans go away are if either the parent in whose name the loans were issued dies, or, the student for whom the loans were taken out dies.
I have a little experience with these loans, unfortunately, so I have explored some options over the years. You can reduce the monthly payment on the loans based upon your income. You can also negotiate for smaller payments based on other issues. However, if you just end up paying the interest the loans will never go away.
My kids were told that, if we took out a parent plus loan for them, they would be responsible for it as well as their own loans. Legally they are not but they understood the deal. They have done a pretty good job making the payments although I have helped them quite a bit, especially when they were just getting started.
And I agree, it's a racket. This all started when the federal government took over the loan business when my oldest was in college. Tuitions went through the roof since anyone could easily get a loan for any amount.
But the standard is quite high for hardship exceptions. It may require total disability on the part of the parent.
This is unfortunately her father’s problem and his alone legally (obviously morally and personally are different issues.) It’s also a really complex issue and you likely need a paid service to really come up with a solution, or attempt to get an appointment with one of the free services. The paid services have a fee of $529 for a one hour live session and months of email access for questions. The name of the two big paid services are studentloanadvise.com and studentloanplanner.com. I linked below some free options from nerdwallet.
I do want to stress, however, this loan (and the interest accruing on it) will likely need to be repaid. And your future daughter in law and her father need to accept that.
they are not eligible for any sort of forgiveness, is my understanding on that small part of your much larger question.
situations and I would probably start with them (often free). This stuff can get very complicated quickly and the nature of assistance and options on forbearance, forgiveness and even legal challenges (something call borrower defense to repayment) keeps evolving. Where she went to school can matter a lot (i.e. for profit vs non-profit). From whom you are borrowing matters. What was studied could matter.
Bottom Line: You need to find a non-profit that works just in this field and they are out there. Quick Google:
https://www.nerdwallet.com/article/loans/student-loans/tisla-review-student-loan-help