Should Debt Outlive a Student?

April 27, 2012

KeyBank will now take a case-by-case approach in deciding whether to collect when a student loan debtor dies, almost certainly a response to a Change.org petition that criticized the lender for not forgiving tens of thousands of dollars in loans made to a late Rutgers University student.

Christopher Bryski, then a Rutgers junior, was injured in 2004 in a recreational accident. After two years in a vegetative state, Bryski died with about $50,000 in student loan debt. His father had co-signed for those loans.

The federal government forgives all debts when students die. Most private lending agencies do the same, said Harrison Wadsworth, special counsel to the Consumer Bankers Association’s Education Funding Committee.

“The general practice is that the bank would relieve the co-signer,” Wadsworth said after the CBA conducted an informal survey of several members Thursday afternoon to learn about their policies. “I think it’s just that the banks want to do the right things in these cases and that’s why these policies are in place.”

But because Bryski’s father had co-signed the loan, KeyBank was not required to write off Christopher’s debts. For six years, it didn’t.

"Some banks take the position that you took out the loan, you co-signed for it, you’ve got to pay it back," said a KeyBank spokeswoman, Lynne Woodman. "Some banks take the position that we will always forgive the loan if a student dies and there's a co-signer. Others do it case by case."

Bryski’s father came out of retirement to meet the monthly payments while the family campaigned for KeyBank to forgive the loans. Family members also asked Congress to pass legislation requiring lenders to make clear whether they’d excuse student loans in the event of death or incapacitation. Bills are pending in both the House and Senate.

But for years, the family's pleas to KeyBank went unanswered. It wasn't until more than 75,000 people signed the Change.org petition this month deriding KeyBank’s “ghoulish” practices that the bank eliminated the remaining debts. The family, which didn't respond to a message seeking an interview, still owed about $30,000 on Christopher’s  loans. 

Woodman declined to comment on Bryski’s case, citing privacy laws, but speaking broadly said the bank would now review cases involving deceased student loan debtors on an individual basis. Woodman wouldn’t say when that policy was instituted, nor would she say how such cases were handled in the past.

Woodman also couldn’t say exactly what “case by case” would mean in practice, though she suggested KeyBank might look at whether a deceased student is leaving a substantial estate in deciding whether to collect.

That didn’t seem to be the case with Christopher Bryski. “When Christopher died, my family didn't just lose a loved one -- we inherited debt for an education that will never be used,” writes his brother Ryan on the Change.org petition. “[E]very month we're reminded of my brother's death in the worst way every time dad puts a check in the mail to a heartless bank.”

At a time when student loans are a hot political issue and the subject of late-night comedy routines, Bryski's story resonated with Change.org visitors. This isn’t the first time the site, which allows anyone to create a petition on just about anything and circulate it worldwide, has been at the center of higher education news. Arizona State University blocked access to the site in February, saying it contained viruses. Skeptics suspected the real cause of the block might have been a petition critiquing the university’s “corporate culture.”

In a statement released by Change, Ryan Bryski expressed gratitude for the online supporters but disappointment that it took that sort of public pressure to persuade KeyBank to relent.

"My family tried for years to get KeyBank to forgive my brother Christopher's loans after he died, and for years they ignored us,” Ryan said. “Thankfully, they couldn't ignore the 75,000 people who signed our petition. It's sad that it took so much to finally get a response, but my family and I are just so grateful that it worked."

Even after the longstanding disagreement between the Bryski family and KeyBank, Woodman said the bank is sympathetic to the family’s loss.

“This is heartbreaking,” she said. “This is real tragedy that these parents have been through and a number of us are holding them in our hearts and our prayers.”

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