Kevin Cullen of the Boston Globe Misses A Few Key Issues on Student Loans

Yesterday the Globe published an article by Kevin Cullen titled Ungrateful Sallie Mae, about a Marine Corpsman who died and left behind $100,000 or so of student loan debt. The Globe’s reporter says: “[His father] wrote to the lenders, asking that the debts be forgiven. Two wrote back, saying they would forgive the loans. The third, Sallie Mae, the government-created college loan provider that privatized its operations in 2004, refused.” The article goes on to portray Sallie Mae in a pretty negative light.

Since I work in the industry (please don’t construe this post as anything official coming from my employer), I immediately had questions. Key questions that would explain how something like that could happen. Questions the author should have investigated and did not. Notably, Cullen’s report was missing any explanation of what kinds of student loans were taken out, whether they had co-signers, and whether the deceased had life insurance.

If the article were actually going to inform anyone about the tragedy and how it happened, it would need to explain that there are two major kinds of student loans: Federal and private. Federal student loans are guaranteed by the government and are automatically forgiven in the event of the death of the borrower. It sounds like the first two loans, the ones forgiven by the lenders, were federal.

The other loan sounds like a private loan. Private student loans are not guaranteed by the government, and do not have as many protections as federal loans do. For most borrowers, they also require a co-signer, usually a parent. The contracts typically state that if for any reason (and I mean any) the borrower cannot or does not pay, the co-signer is on the hook for the loan. That’s how co-signing works, and why many financial advisers suggest that you avoid co-signing a loan for anyone if at all possible.

Now, this is still a horrible story, and the young man’s death is undoubtedly a tragedy. But the article fails to explain any of the background of how the wreckage left behind by the tragedy came to be.

It also fails to explain the existence of a whole system set up to pay your bills if you die. It’s called life insurance. In general, life insurance is provided all military personnel. I do not know if there are any exceptions and I do not know if the Lieutenant was one, because Cullen doesn’t even bother to ask about that.

Now, I’m no journalist, but even I can tell that if you want to write an article that gets beyond “wow, college is expensive and loans are hard to pay back,” you need to do things like consult experts and look up regulations. At the very least, you could consult Finaid.org. Sallie Mae presumably has PR flacks, but it doesn’t sound like Cullen asked them for a comment. He does say that the grieving father was unable to navigate Sallie Mae’s phone tree to get to a real human, but does not mention whether he himself tried to do so, or whether he tried their email customer support offering.

Is it budget cutbacks that prevent Kevin Cullen from doing any actual leg-work on his articles? Because really, there’s nothing to this piece except that it sucks to die and it sucks to borrow money and not be able to repay it, and that’s not actually news.