Marcia DeOliveira-Longinetti's son, Kevin, was tragically murdered last year. And now – instead of just mourning her son – Marcia is fighting with a state-run New Jersey student loan agency that refuses to forgive her son's student loan, even though her son is no longer alive.
Unlike his state loans, the federal loans her son took out for school were immediately written off when she informed them of her son's passing. But the letter Ms. DeOliveira-Longinetti received from the New Jersey state lending agency read as follows:
“Please accept our condolences on your loss. After careful consideration of the information you provided, the authority has determined that your request does not meet the threshold for loan forgiveness. Monthly bill statements will continue to be sent to you.”
I find it highly unlikely that Ms. DeOliveira-Longinetti will be accepting any condolences from these people any time soon.
New Jersey's government lending program has a unique set of loan laws that allows for companies to refuse to forgive debt even after the person in question has passed away.
Ms. DeOliveira-Longinetti couldn't believe that she would have to continue to pay her son's payments each month. But, as an investigation by ProPublica and The New York Times found, New Jersey's government lending programs are rife with stories like hers.
Apparently, New Jersey's loaning practices have some of the strictest and least forgiving rules of any government lending agency. What makes this especially dangerous is that – because they aren't a private company – agencies like these have access to extremely powerful means for collecting the money they say they are owed.
As Annie Waldman of the New York Times writes,
“New Jersey can garnish wages, rescind state income tax refunds, revoke professional licenses, even take away lottery winnings – all without having to get court approval.”
As Daniel Frischberg, a bankruptcy lawyer, so succinctly put it, “It's state-sanctioned loan-sharking."
Ms. DeOliveira-Longinetti had co-signed the loan, which is the loophole the state agency is using to continue her son's payment. It is one of the only states where this could be possible. And, to make matters worse, it is the largest state-based student loan program in the country.
But don't worry: To fix this problem, New Jersey has been encouraging the 18-year-olds who borrow money to take out life insurance. This is so that – you know – if they die, they can help their parents with the loans that the state will force them to keep paying.
All I can say is, I'm very glad I don't live in New Jersey.