Schumer: Two Student Loan Companies are Forcing Parents of Syracuse Native Tragically Killed By Drunk Driver, To Pay Current Loan Debt - Schumer to Demand that Companies Do the Right Thing & Forgive Their Son's Student Loan Balance

Press Release

Today, standing inside the Federal Building in Syracuse, U.S. Senator Charles E. Schumer joined Mr. and Mrs. David Prior and called on two private loan companies, American Education Services (AES) in Pennsylvania and Education Investment Finance Corporation (EIFC) in New York, to immediately forgive an outstanding student loan for their son Andrew Prior, a Syracuse native who was tragically killed by a drunk driver over two years ago. The two companies are overseeing the same loan and have failed to work to resolve the final student loan held by Andrew Prior. 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 loan holders, although some private companies also forgive loans under these circumstances.

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. Now, two years later, AES and EIFC continue to hold the family accountable for a remaining student loan. This significant amount of money puts an unnecessary financial strain on the family. The companies have even threatened to take away the family's car and home. Schumer demanded that AES and EIFC do the right thing and end the financial and emotional hardship they have already caused for the Prior family.

"The Prior family has dealt with the tragic death of their son Andrew with courage and dignity, and I will not stand idly by when private loan companies are robbing this Syracuse family their right to recover from this tragedy," said Schumer. "Many loan companies, both federal and private, forgive student loan debt when the primary lender passes away, and I'm urging American Education Services and Education Investment Finance Corporation to waste no time in giving the Prior family the loan forgiveness they deserve. Andrew was killed by a drunk driver shortly after graduating from Northeastern University, and I expect these shark-like companies to have some compassion when considering his case. To put it simply: these lenders must end this financial and emotional hardship for Mr. and Mrs. Prior, and should consider this a warning for the next time they intend to leave grief-stricken families out to dry."

Schumer was joined by David and Rose Prior as he fought to relieve them of this undue burden, a case he has 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 loan holder dies. This protects the family of the loan holder, 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 private student loans in collections 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 loans 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 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 conversation between AES 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.

A copy of Sen. Schumer's letter appears below:

Dear Messrs. Preston, Khan and Garg:

I write on behalf of my constituents, the family of Andrew Prior. Mr. Prior's son Andrew took out a loan with My Rich Uncle on October 3, 2006. Education Investment Finance Corporation (EIFC) then bought and in conjunction with American Education Services (AES) continues to service Mr. Prior's loan to this day. At the request of the Prior family, on January 29, 2013, I wrote a letter to the Consumer Financial Protection Bureau asking them to look into this case and fulfill its charge of monitoring consumer financial products for abusive practices. I am now asking that you work with the family to expeditiously resolve their loan.

In November of 2010, after just completing his undergraduate education, Andrew Prior was killed by a drunk driver. Since this time his family has been attempting to deal with the emotional and financial hardships that occur after the loss of a child. These financial hardships were brought on by the existence of three student loans that Andrew had in collections 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 due to the untimely death of their son. I ask that EIFC and AES work with the family to similarly resolve the remaining loan.

Student loan protections are necessary to ensure the financial viability of Americans who are in the process of getting an education or have received an education. One such protection for federal student loans is the forgiveness or discharge of a loan in the event that the loan holder dies. This practice is not always followed for private student loans. However, major private student loans 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.

As a parent myself, I ask you to do the right thing and work with the Prior family to do as Discover Student Loans and Education Empowerment Fund have and resolve the final remaining student loan for Andrew Prior. This grieving family deserves to get some peace of mind. Please do not hesitate to contact me or my staff should you have any questions.

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