It is increasingly clear that many Americans are becoming weighed down by the financial burden of college loans. The cost of attending a university has risen dramatically in the past 20 years, and as such, many folks – both students and co-signers – must find ways to make this situation more manageable for the future.
Part of the problem is the way in which private student loan agreements are structured, compared to federal college debt. According to the Houston Chronicle, many government-subsidized lending programs allow a borrower to discharge their debt if they pass away during repayment. On the other hand, many private lenders – some of whom are heavily invested in the student loan industry – do not offer these so-called “death discharge” clauses.
Mark Kantrowitz, a student loan expert who spoke with the Chronicle in an interview, said that term life insurance might be a smart choice for both college-bound students or their co-signers who are afraid of being left with a potentially unpayable bill. Given the relatively high interest rates on private educational loans, this could be an option to seriously consider.
“It may be advisable for co-signers to take out a term life insurance policy on the student borrower in the amount of the loan to cover the costs should the student borrower be the victim of an unfortunate circumstance,” Kantrowitz commented.
Planning for a loved one’s death is a difficult process, but during tough economic times it is important to find ways to safeguard against financial insecurity. LifeInsure.com offers access to the resources Americans need to protect themselves from an uncertain situation. To learn more about details and prices of different policies available in today’s insurance market, continue exploring our website today!