Collecting from the dead

Dead people default on their student loans at a pretty alarming rate. Student loans fall into the area of "having one's affairs in order" and the paperwork that is left for the living to clean up in this brave new information age.

What happens to a student loan upon the borrower's death is that the loan vanishes. Student loans are not collectible on an estate with proof of death. Simply send in a copy of the death certificate to the appropriate loan agency, and the loan will be removed from the system. In New York, we can even accept a faxed copy provided the propers seals and markings are on it.

(The reason for need of proof is that people lie. I called a borrower's home phone who had been ducking calls for weeks and got the message she'd gone to the store, back in a couple of hours. Called back in a couple of hours and the woman who answered said, "Ummm...no....she's dead. Yeah."

"What, she get hit by a bus on the way back from the store?"

"Erp..." Click.

I'm 99% sure that I actually spoke to the borrower. But there is still that 1% possibility I will be referred to in hushed tones as "that fucking asshole collector" at family gatherings for decades to come.)

Apparently with loans that have only been in collections a short time, dealing with a death is not a huge problem - someone is trying to tie up loose ends, this is one more, fine, I'll fax you the death certificate. Over, done, move on.

These are not the borrowers I work with. All the loans in our department have been in default a minimum of six months, most for years. These are people who were actively trying to avoid us, or were living in such a way that they couldn't be found easily.

An example was a number I called on our predictive dialler, and asked the person about the borrower. "Oh, gosh, yes...she lived at a halfway house I run for addicts. She died of a heroin overdose two years ago, I think. So sad. She was on the run from her parents, and I don't know anyone who knows her still. Sorry."

So what do I do? I check LexisNexis, and they have no death record for her. I then check the state death records listing, since I have her age and date of birth. And there is her death listing. And I can get her death certificate for...10 bucks.

No, the company won't pay for it. I've already asked.

So I note the death notice, note where I found it, and mark her account as deceased. Her account will then pass out of my desk, and end up in a feeder chain for uncollectable accounts (dead, active bankruptcy, disabled, screaming lawyer really loud, etc.) And in a reasonable world, the account would be forgiven and deleted by our company and the lender.

But that is not the case here. Without the death certificate as definite proof, there is no dissolution of the loan. It is recycled to a different collection agency with all the other active loans we weren't able to convert. Which means the loans of the dead continue on, and we must call and confirm over and over and over.

"Man, I get calls like this about once a year," says one reference. "The poor woman is dead - she's been dead for over five years. I keep telling you people that and you keep calling. Death certificate is on file at the town call. Costs you ten bucks." Click.

The loans must be charged off at some point, I'm sure. Five years is an awfully long time, though. And I'm sure if I stay long enough on the same contract, I will see the dead return. And I will look up their information, possibly remember them if there was a previously memorable reference call, mark them deceased, and send them on their way again.