Personal Finance

She took out $20,000 in loans for her son's college. Then he went blind

Key Points
  • A bipartisan bill would allow parents who borrowed student loans for children who became severely disabled to walk away from their debt.
  • Between 50,000 and 75,000 student loan borrowers apply for a total and permanent disability discharge each year, estimates Mark Kantrowitz, publisher of and an expert on education debt.
Mary Desorcy hopes the government will cancel the student loans she took out for her son, before he became legally blind.
Source: Mary Desorcy

Mary Desorcy borrowed $20,000 in 2008 from the government to help her son pay for college. Soon after, her son lost his vision and had to leave school. His education debt was canceled, thanks to the "total and permanent disability" discharge available to federal student loan borrowers.

Her loans, however, are still outstanding.

Her son planned to repay the student loans she'd taken out for him, but he hasn't been able to work. Instead, Desorcy, who works as an office manager, postponed her loan payments to take care of him in the aftermath of his disability. Today she owes $30,000, thanks to interest.

Why Ramit Sethi says student loans 'can be a great investment'

"My son had to drop out, not by his own choice," said Desorcy, 59. "I should get a little help."

A bipartisan bill, introduced by Rep. Peter Roskam, R-Ill., and Sens. Chris Coons, D-Del., and Rob Portman, R-Ohio, would offer relief to parents like Desorcy. Under the proposed legislation, parents who took out federal student loans for children who became disabled would be released from their debt.

Legislators will have to vote on the bill by the end of the year or reintroduce it in the new Congress.

Currently, parents who borrowed for their children's education can only have their federal loans discharged if their child dies or if they become severely disabled themselves.

Source: Mark Kantrowitz

Between 50,000 and 75,000 student loan borrowers apply for a total and permanent disability discharge each year, estimates Mark Kantrowitz, publisher of and an expert on education debt.

As college costs rise, parent borrowing has become more common and now stands at a historic high.

In a recent letter to Education Secretary Betsy DeVos, the legislators who introduced the bill wrote, "we have constituents— hardworking Americans — who bear the burden of student loan debt in the face of their child's disability."

What if I'm struggling with student debt for a child?

If you took out so-called Parent Plus loans for your child, "you should know there are options for reduced payment and possible forgiveness," said Betsy Mayotte, president of The Institute of Student Loan Advisors, a nonprofit that helps student loan borrowers with free advice and dispute resolution.

Parent borrowers may be eligible for reduced payments, Mayotte said, including the extended and graduated repayment plans. If you consolidate the Parent Plus loan into a "direct" loan, you could enroll in an income contingent repayment plan, which caps your monthly payments at a percentage of your income and typically results in the cancellation of your debt after 25 years. "This can be particularly helpful for retired parents on fixed incomes," Mayotte said.

Parents can also appeal to the Education Department to be put in a so-called alternative repayment plan, Kantrowitz said, which also comes with reduced monthly payments.

Many parent borrowers don't realize they are potentially eligible for public service loan forgiveness, Mayotte said. That program allows certain not-for-profit and government employees to have their federal student loans canceled after 10 years of on-time payments.

More from Personal Finance:

Here's what you need to qualify for public service loan forgivenessThe government may forgive your student loans if you meet these demands
Education Department is failing to provide public service loan forgiveness, senators allege