Wells Fargo Bank, with branches in Connecticut, says it will no longer press repayment of college loans from students who die or become permanently disabled.
In the past, the San Francisco bank’s loan covenants sought repayment whether or not the student was alive or physically or mentally unable to pursue a living. The bank’s debt collection efforts also extended to parent or anyone who co-signed for the students loan.
Wells Fargo says those days are past for  borrowers who qualify. In Connecticut, the bank runs the former Wachovia Bank network.
“Our student lending underwriting process is based on a future ability to repay, rather than a borrowers present ability to repay,” said Kirk Bare, head of Wells Fargo Education Financial Services. “When that future ability to establish financial independence, acquire assets, and build an estate is compromised by a death or permanent disability, loan repayment becomes especially burdensome.”
Once it has official proof of the pupil’s death or disability, the bank says it will initiate steps to cancel the debt.
In the future, the bank says new Wells Fargo consumer credit agreement language will explain the new benefit.
