Today, U.S. Senator Charles E. Schumer announced that he successfully petitioned the two private companies, one an asset manager and the other a loan servicer, to forgive the student loan debt of the late Andrew Prior, which was causing severe and undue emotional and financial stress for Mr. and Mrs. Prior. Education Investment Finance Corporation (EIFC) in New York and American Education Services (AES) in Pennsylvania, have agreed to immediately forgive an outstanding student loan for Andrew Prior, a Syracuse native who was tragically killed by a drunk driver over two years ago. The two companies had managed the same loan and failed to work to resolve the final student loan held by Andrew Prior, which prompted Schumer to stand with the Prior Family last week and demand a swift resolution. While it is common practice for federal student loans to be forgiven or discharged in the event that the loan holder dies, this practice is not required of private loans, although some private companies also forgive loans under these circumstances.
"At long last, the Priors have a student loan balance of zero. This is a just and appropriate result that should have happened right away, and now that it has, I hope it will help provide some measure of relief to the family," said Schumer. "As soon as we heard that two private companies had gone two years without forgiving Andrew Prior's student loan debt, even though he was robbed of his life by a drunk driver immediately after graduation, we wasted no time to ensure that these companies did the right thing. Although the Priors should not have had to wait two years for their debt to be absolved given the circumstances, I'm pleased that this is one burden they will no longer have to bear."
AES is a loan servicer and EFIC is an asset manager of the portfolio of loans for which Andrew Prior's loan was included. Schumer acknowledged that once the companies were made more highly aware of the situation last week, they responded quickly to forgive the loan.
In the case of Andrew's tragic passing, due to a drunk driver, his federal loan servicer and two other private loan companies did the right thing and absolved the debt. Bur for two years, AES and EIFC failed to work with the Prior family on their remaining student loan debt. EIFC has informed the Senator's office that they had no knowledge of the situation until the Senator brought it to their attention. The significant amount of debt put an unnecessary financial strain on the family.
Last week, Schumer was joined by David and Rose Prior as he successfully fought to assist them with this undue burden, a case he had been working on since January. Schumer highlighted that in the case of federal student loans, there are protections in place that require loans to be forgiven or discharged in the event that the borrower dies. This protects the family of the borrower, who are commonly required to co-sign for students because they are too young to have sufficient credit. In Andrew's case, he had three outstanding private student loans at the time of his death. The companies that owned two of these loans, Discover Student Loans, and Education Empowerment Fund, have worked with the Prior family to discharge the loans and ensure that this family's credit is not negatively affected.
This practice is not always followed for private student loans. However, major private student loan providers such as Sallie Mae and Wells Fargo both have established programs to follow this practice. Both Sallie Mae and Wells Fargo forgive any unpaid balance in the event of a primary borrower's death. This precedent allows for compassion to enter the financial marketplace, and Schumer said last week that AES and EIFC should follow suit. Schumer previously wrote a letter to the Consumer Financial Protection Bureau (CFPB) asking that they review the Priors' case, which initiated conversations between AES and EIFC and the Prior family, which at the very least facilitated conversation between the parties.
Andrew Prior was a graduate of Northeastern University in Boston, who majored in American Sign Language and English Interpretation. In November of 2010, just months after his graduation in May, Andrew was riding on his Vespa scooter and was tragically killed by a hit-and-run drunk driver in an SUV. Andrew is survived by his parents and his two brothers John and Mark.