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Cosigning Student Loans - Learn From My Mistakes - Please Read

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Anonymous
Not applicable

Re: Cosigning Student Loans - Learn From My Mistakes - Please Read

Dont I know it....i undetstand what shed saying though. The codigner did not receive an ecucation for the cosigning...but now shes stuck with the primary borrowers debt that she cosigned on in good faith.
Message 81 of 92
steel_string
Regular Contributor

Re: Cosigning Student Loans - Learn From My Mistakes - Please Read

Well, the nearly unanimous conventional wisdom when I was in college a few years ago was that law schools and medical schools in particular paid relatively little attention to where you did your undergrad. And what I was trying to point out was that if you're blowing through the limits on federal loans and taking out private loans (resulting in needing a cosigner) for undergrad, you're borrowing an alarming amount of money. Again, there'll be some people that get jobs in biglaw or become doctors and can pay this stuff off with tolerable sacrifices. For the rest, it's a questionable financial decision.

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Message 82 of 92
Anonymous
Not applicable

Re: Cosigning Student Loans - Learn From My Mistakes - Please Read

Depends on your debt to income ratio, be cause this $50,000 and growing cosign counts ad your debt. So short answer...yes
Message 83 of 92
MissMc89
New Contributor

Re: Cosigning Student Loans - Learn From My Mistakes - Please Read

I went to an expensive liberal arts college and have been out of school for 3 years in a career that has nothing to do with what my degree is in. My mama let me know she wouldn't cosign for any loans, and I understood. Even if she was in good financial shape (and she wasn't), my education was and is my responsibility. I could've gone to a community college and transferred or straight to a state school, but I just HAD to go to a private college. I'm on the Pay As You Earn Plan and will be making payments for the next 2 decades I believe, but only I am affected by this decision, as I think should be the case. I had an econ teacher in high school tell our class that she wouldn't take out loans for her children, and I thought that was a bit harsh, but she was right. There are so many opportunities out there for getting an education that I'm confident that if I ever have children, they'll hear the same from me. I'd like to start a college fund for them to help with expenses, but anything that couldn't be covered outright or with in-school payments to the school would mean that my kid would have to make some tough decisions about their education. 



Message 84 of 92
xyryux
New Visitor

Re: Cosigning Student Loans - Learn From My Mistakes - Please Read

I came late to this forum, but I'm glad you spelled this out. A friend is all but begging me to cosign, because he doesn't qualify for federal aid anymore and his relatives do not want to cosign. He's been "playing the violin" and guilt-tripping, but I'm extremely reluctant.

Message 85 of 92
Anonymous
Not applicable

Re: Cosigning Student Loans - Learn From My Mistakes - Please Read

I wish I had heard this. I went to a private school my freshman year despite having a university with a great program right in my hometown. I did not want to go to the school but my dad insisted, thinking where you graduated from mattered not the degree (nursing). We didn't realize until later but he actually put the loan in my mother's name. So now she is paying a $20,000 loan (will eventually pay back close to $30,000) for a school I didn't even graduate from. Luckily I transferred back home after the 1st year and took out loans only to cover tuition and lived at home. Finished paying off my loans last year on my own and am now helping my mother pay off the Parent Plus. She's paying the minimum every month and I pay a couple hundred extra on top each month. Were hoping she can get it refinanced to a lower interest rate (currently @ 7.75%) as were not making as much progress as I had hoped (still have $10,500, loan taken out in 2005).

Message 86 of 92
Anonymous
Not applicable

Re: Cosigning Student Loans - Learn From My Mistakes - Please Read

(quote)I came late to this forum, but I'm glad you spelled this out. A friend is all but begging me to cosign, because he doesn't qualify for federal aid anymore and his relatives do not want to cosign. He's been "playing the violin" and guilt-tripping, but I'm extremely reluctant./(quote)

 

This is exactly the kind of person you SHOULDN'T be co-signing for. All the screaming-bull-red-flags are there. He's waving them in your face"

1) Guilt-tripping you. (Do you really want to have your credit crushed with his limits and collarteralized interest, making it difficult for you to buy or refinance a house, car, your own further education, those of your own children, spouse, etc? "playing the violin" in another form of bullying? He means to wear you down and trample your own self-perspective. Anything to get you to sign. Is this who you want to rely on to be mature about getting those loans paid off fast, without blemishing your credit? What the heck have you got to be guilty about? That you have good credit, assets, and income resources and he doesn't?)

2) His relatives are unwilling to co-sign. (I'll bet they know him and his prospects, attitude, and aptitude for ever paying the loan off in a responsible, timely manner?)

3) "...doesn't qualify anymore"... Hmmmm, Run, Forrest, Runnnnnnnnnnnnnnn!

Message 87 of 92
Anonymous
Not applicable

Re: Cosigning Student Loans - Learn From My Mistakes - Please Read

(quote)I wish I had heard this. I went to a private school my freshman year despite having a university with a great program right in my hometown. I did not want to go to the school but my dad insisted, thinking where you graduated from mattered not the degree (nursing). We didn't realize until later but he actually put the loan in my mother's name. So now she is paying a $20,000 loan (will eventually pay back close to $30,000) for a school I didn't even graduate from. Luckily I transferred back home after the 1st year and took out loans only to cover tuition and lived at home. Finished paying off my loans last year on my own and am now helping my mother pay off the Parent Plus. She's paying the minimum every month and I pay a couple hundred extra on top each month. Were hoping she can get it refinanced to a lower interest rate (currently @ 7.75%) as were not making as much progress as I had hoped (still have $10,500, loan taken out in 2005).(quote)

 

Sorry, but what do you mean, SHE's paying off the loan. I see that you're making the bulk of the payments, but still, YOU are the morally responsible party. And I see you have a Discover card with a CL that would cover the $10.5k. Call up Discover right now and get a BT at $0 for 15 months and get your Mom some peace of mine.

Message 88 of 92
SCF
Valued Contributor

Re: Cosigning Student Loans - Learn From My Mistakes - Please Read


@Anonymous wrote:

 

Sorry, but what do you mean, SHE's paying off the loan. I see that you're making the bulk of the payments, but still, YOU are the morally responsible party. And I see you have a Discover card with a CL that would cover the $10.5k. Call up Discover right now and get a BT at $0 for 15 months and get your Mom some peace of mine.


Parent Plus loans exist explicitly for parents to borrow money for their children's education.  The money is borrowed solely by the parent - the student doesn't have to know any of the details or give their consent.  The parent is told explicitly that the debt belongs to them alone when they sign the dotted line.  The only moral, legal or other obligation a student has toward a Parent Plus loan is specific to whatever agreement (if any) they make with the parent.

 

It sounds like Mom and student had one put over on them here by Dad, which is too bad, because that could have been avoided by learning about the loan before agreeing to it.  It also sounds like student is honoring their agreement with Mom by making the extra payments.  Taking a relatively low interest debt that has borrower protections (loan is cancelled if parent or student pass away, it can be consolidated and put on an income-based payment plan based on Mom's income, payments can be deferred in some circumstances) and putting it on what it is likely a high interest credit card is just another poor decision.

Message 89 of 92
Anonymous
Not applicable

Re: Cosigning Student Loans - Learn From My Mistakes - Please Read


@SCF wrote:

@Anonymous wrote:

 

Sorry, but what do you mean, SHE's paying off the loan. I see that you're making the bulk of the payments, but still, YOU are the morally responsible party. And I see you have a Discover card with a CL that would cover the $10.5k. Call up Discover right now and get a BT at $0 for 15 months and get your Mom some peace of mine.


Parent Plus loans exist explicitly for parents to borrow money for their children's education.  The money is borrowed solely by the parent - the student doesn't have to know any of the details or give their consent.  The parent is told explicitly that the debt belongs to them alone when they sign the dotted line.  The only moral, legal or other obligation a student has toward a Parent Plus loan is specific to whatever agreement (if any) they make with the parent.

 

It sounds like Mom and student had one put over on them here by Dad, which is too bad, because that could have been avoided by learning about the loan before agreeing to it.  It also sounds like student is honoring their agreement with Mom by making the extra payments.  Taking a relatively low interest debt that has borrower protections (loan is cancelled if parent or student pass away, it can be consolidated and put on an income-based payment plan based on Mom's income, payments can be deferred in some circumstances) and putting it on what it is likely a high interest credit card is just another poor decision.


This is exactly my point. I wasn't even 18 yet when I was accepted or started at the school. I didn't know anything about it let alone that it was in my mother's name until started talking to my mom about paying off my nursing school loans. I kept wondering why when I would try to log into the website to see the info, I had to put in my mother's information instead of mine. I didn't know it was a Parent Plus loan until recently when I was trying to help refinance it for a lower rate and the company told me they don't help with Parent Plus loans. Even though we both work, trying to pay off $10,500 in 15 months would put even more stress on us (especially my mother who is the head of household). At the moment, we are able to put $400-$500 each month towards it which is more than the minimum. If we can get a lower interest rate on the loan, then at least more of our payments can go towards the actual priniciple and not interest. 

Message 90 of 92
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