Wells Fargo will pardon any student loan debt where the beneficiary dies or becomes permanently disabled, according to their new student loan agreement, released on Friday.
“When a death or permanent disability occurs, their future ability to repay is compromised,” said Kirk Bare , the head of Wells Fargo Education Financial Services. “We believe it is important to be responsive to events that affect these unique customers, and their ability to obtain financial independence and repay their loan.”
Before this new agreement, the co-signer had to pay back the loan under the circumstances. The student loan forgiveness program will be an addition to both existing and future Wells Fargo student loans.
If a student dies or becomes disabled, the financial institution will need a verbal or written policy that notifies the bank of that occurrence, and then must be followed with the proper documentation. Once the necessary documents are submitted, a bank representative will work with the co-signer to legally forgive the obligation to repay.
“Borrowers of student loans are a very unique subset of customers for us,” Bare said in a statement. “Formalizing this into our standard policies and procedures ensures that customers and their families who are impacted by these types of unfortunate situations are provided needed relief.”
Wells Fargo joins Sallie Mae, which also provides student loan forgiveness upon death or disability. Sallie Mae is a financial institution that purchases student debt on the secondary market and also provides student financing.
Via Fox Business