Saturday, June 16, 2012
Francisco
Reynoso has been in a world of hurt since the death of his son. Not
only has Reynoso grieved the loss of Freddy Reynoso, but he’s also
suffered an onslaught of bill collectors seeking repayment of the son’s
college loans.
When Freddy Reynoso got into Berklee College of Music in Boston,
his father agreed to co-sign his son’s substantial private loans. Freddy
graduated in May 2008 and was returning from a job interview when he
lost control of his car and died in an accident. Francisco Reynoso
became responsible for paying the debts, which would appear to be worth
more than $200,000.
Freddy had multiple loans. Following well-established practice, his
loan from the federal government was cancelled. However, he also had
private loans, one from Bank of America and others with Education
Finance Partners. Bank of America sold their loan to First Marblehead,
which probably bundled it into a larger security investment, although
neither Francisco Reynoso nor his lawyer have been able to figure out
exactly what happened to it or how much is owed.
Education Finance Partners went bankrupt after it paid $2.5 million
to settle charges that it paid colleges—including Berklee College of
Music—to steer students to higher-interest loans. It is unclear who now
owns this set of Freddy Reynosa’s loans, but they are serviced by ACS
Education Services, a subsidiary of Xerox. When both Francisco Reynosa
and ProPublica asked ACS for details of the loans, they did not respond.
All the father knows for sure is that he can’t afford to repay the
loans, not on his $21,000 a year gardener’s salary, while supporting his
wife and teenage daughter.
-David Wallechinsky, Noel Brinkerhoff
To Learn More:
Grieving Father Struggles to Repay Dead Son's Massive Student Loans (by Marian Wang, ProPublica)
Debt Collection FAQs: A Guide for Consumers (Federal Trade Commission)
Discharge/Cancellation (U.S. Department of Education)
Senior Citizens Still Paying Off Student Loans (by Noel Brinkerhoff, AllGov)
Who’s Profiting from Student Loans? (by Noel Brinkerhoff and David Wallechinsky, AllGov)
Student Loan Debt Reaches $1 Trillion (by Noel Brinkerhoff, AllGov)
Student Loan Default Rate Highest in 14 Years (by Noel Brinkerhoff and David Wallechinsky, AllGov)
