- Russell Friend, 22, committed suicide shortly before graduating from college
- His mother Regina had accumulated $55,400 in loans and interest to help him pay for school
- Those loans were forgiven by the government but IRS considers that ‘gift’ taxable income so she has to pay an additional $14,000 more in taxes
PUBLISHED:04:20 EST, 21 September 2012| UPDATED:06:17 EST, 21 September 2012
A mother in Maryland still grieving the death of her 22-year-old son is now faced with a new unwelcome reminder of his suicide: a $14,000 tax bill.
When Russell Friend was found dead in late August last year, the government forgave his student loans and the portion of the payments that his mother Regina was expected to pay as is protocol.
But not all of the payments stopped because the Internal Revenue Service considers forgiven loans to be a form of taxable income, so now Ms Friend faces a substantially higher tax bill that she won’t be able to pay.
Loving mother: Regina Friend (right) accrued $55,400 in loans and interest in order to help her son Russell (left) pay for his tuition at Temple College in Pennsylvania
After originally starting college at Morgan State, Russell transferred to Temple College where he was a popular member of the track team and had completed enough credits to graduate.
He went missing in August 2011, left a note saying ‘sorry guys’ and a message on his Facebook saying ‘I’m sorry everyone’, and his body was found on the banks of the Delaware River days later.
Federal policy automatically dismisses any loans taken out by students in the case of their death of permanent disability, and the loans and interest that Ms Friend had accrued- which totalled $55,400- were also dropped.
Ms Friend was far from the only parent to have to rely on this regulation when their child died, as The Baltimore Sun reports that the Department of Education cancelled $2.7billion in such loans in 2011.
The problem that comes with said cancellations is that the amount of those forgiven loans are taxable, and now that means Ms Friend is faced with a $14,000 payment on top of her existing taxes.
Though she has a steady job in the technology department of PHH Corp, a mortgage company, both Ms Friend and her tax preparer do not know what to do about the additional costs.
Tragic: Russell, a popular member of the school’s track team, disappeared in August 2011 and his body was found on the shore of the Delaware River
‘As far as what I intend to do about it, I have no idea,’ Ms Friend told The Baltimore Sun.
‘I don’t think I’ve even seen $14,000 all at once. I don’t want to give the impression that I’m dirt poor or anything, but I do not have any means of taking on that kind of debt.’
Similar situations happened to the families of Freddy Reynoso and Amanda Greenhalgh, students in California and New Jersey respectively who both died and their parents were left struggling to pay the thousands of dollars of taxes that followed the forgiveness of their loans.
‘While there are options for some borrowers, they are complicated and confusing,’ said Persis Yi, a lawyer for the National Consumer Law Center.
‘It is most unfortunate that the system is set up to wreak great havoc on borrower’s lives at a time when the borrower deserves the most compassion,’ the lawyer told The Huffington Post.
The confusion and bills just add to the pain that Ms Friend has tried to deal with over the past 13 months.
‘I don’t think there will ever be closure for what happened. It’s something I will have to learn to live with, but it is like throwing salt into a wound,’ Ms Friend said
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