
Quoting
anonymoose
First of all, you can keep your condescension. I didn't go into painstaking detail about the circumstances in an effort to keep my question as concise as possible. The question guidelines at the top of the page ask for that specifically. Besides, any thinking person would surely surmise that a dispute over tens of thousands of dollars between a person and her parents is probably quite complex, not a simple matter of someone "not keeping track of" $90,000.
There were two loans taken out, both for $32,000, between 2004 and 2006. During that time my wife was in her freshman and sophomore years at college. She was always told her parents would pay for her education, and she trusted them wholly. I would hardly consider an 18- or 19-year-old negligent if her parents give her a document to sign and she doesn't think twice about it. She had no idea at that age that her parents might abuse that trust and spend money that she would be obligated to repay later. The loans have a present balance of $90,000 because of years of interest capitalization.
To answer your questions, I think it is quite simple for her mother to get her hands on the money, although I'll admit I'm speculating. If I remember correctly, private student loans like these issue checks to the borrower and cosigner directly. When the check was sent to her parents' address, her mother probably took it to the bank and deposited it, simple as that. Even if she encountered resistance by the teller because the check was made out to her AND her mother, I can imagine that most bank tellers in their quiet suburban town would deposit it anyway if the mother says "my daughter is away at college and this is her tuition money." Again, that's speculation, but a likely scenario.
As to your second question, all the documentation for these loans was sent to my wife at her parents' address. Most undergrads list their parents' address as their permanent address, particularly while living in the dorms. I don't see what is so surprising or unusual about that.