College Loan Forgiveness Upon a Student’s Death

When John Roark’s 26-year-old daughter died of cancer last year, he took over settling her estate. Two lenders related to her student loans, Sallie Mae and a Missouri student loan company, expressed their sympathy and forgave the loans. But Wells Fargo refused to forgive the loans and began sending multiple letters to John weekly, asking him for the money even though he didn’t co-sign the loan.

In mid-December, Wells Fargo formally enacted a policy for forgiveness of loans in the event of a student’s permanent disability or death. Roark was able to have his daughter’s loans forgiven, and now he devotes time to finding a cure for the cancer she fought. He advises families settling their children’s estates to be vigilant when communicating with financial institutions. He suggests taking down names and dates of conversations, “or it won’t go away.”

Susanna Kim, College Loan Forgiveness: When Student Dies, Should Parents Have to Pay?, abcnews, Feb. 11, 2011.