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cosigned on student loan

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Anonymous
Not applicable

cosigned on student loan

I cosigned on a student loan several years back with a daughter so she could go to nursing school.  She finally finished school (after getting pregant 2 times) but has not passed the board yet.  Her loan was deferred and under forebearance (I really don't undertstand these).  I received a lot of calls and letters from AES because I was the cosigner and was told that she could not defer the loan any more and that I would have to pay it.  They told me that they did not even have to contact her because I had cosigned on the loan.  I made arrangement with them to pay a low amount for 3 months and then the payment would to the orgininal payment amount for the balance.  I will be in my early 80's when this is paid off.  My daughter will not talk to me anymore because "I messed it up by paying anything".  Could someone explain to me if this would be true.  All I know is that the loan started around 17,000 and now because of interest it is over 32,000.  It was my understand that they could take my pension or put a lien on my house, etc.  Am I crazy?  I hope someone can give me some advise.  Thanks

Message 1 of 9
8 REPLIES 8
FrugalRican
Blogger

Re: cosigned on student loan


@Anonymous wrote:

My daughter will not talk to me anymore because "I messed it up by paying anything". 


First of all, I hate to hear a story like this. My knowledge on student loans is limited, but I wish you luck in dealing with this situation.

 

But what exactly does she say that you messed up by paying this loan?

Did she think she could just hide from it and that maybe it'd go away?

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Message 2 of 9
laz98
Senior Contributor

Re: cosigned on student loan

I'm very sorry to hear about your situation.  I hope you & your daughter can come to a more positive resolution.  You are not crazy at all.  You are quite justified in being concerned over this unfortunate predicament.

 

Student loans never just go away, so I'm not sure why she would make such a remark.  Student loans are not like other debts; they can & often do follow you for years & years, which is why many people caution against borrowing more than necessary.  My brother had his wages & income tax returns garnished for several years a long time ago, & he stupidly will probably go through this again, despite being old enough to be smarter than that & having already been through the hassle of it before.

 

Is she working at all?  Is she simply refusing to pay the loan back?  Does she pay the rest of her bills?  Do you know what the rest of her credit history looks like?

Message 3 of 9
Anonymous
Not applicable

Re: cosigned on student loan

She said that because of my payments she would not be able to defer the loan anymore.  She has deferred it/forebearance several times. (I really don't understand the difference between these).  But the AES folks said she could not do that any more.  I just found out that she is pregnant again so I really think she just does not even want to work.  .

Message 4 of 9
laz98
Senior Contributor

Re: cosigned on student loan


@Anonymous wrote:

She said that because of my payments she would not be able to defer the loan anymore.  She has deferred it/forebearance several times. (I really don't understand the difference between these).  But the AES folks said she could not do that any more.  I just found out that she is pregnant again so I really think she just does not even want to work.  .


If the lender said she can't do it anymore, than I guess it doesn't matter what she says about it Smiley Sad  I know that I have deferred my payments after having made payments for a while, but perhaps her situation is different.

 

I'm sorry she is not more willing to handle this & take the burden off of you.

Message 5 of 9
Chris123nTx
Established Contributor

Re: cosigned on student loan

Sadly you are 100% liable for this/these loans, and there is really no way out for you other than to pay them, or see your financial life ruined.

One of the worst things a family member can ever do is to cosign a loan of any kind for child, parent, or anyone else. When they stop payment and you are stuck you not only lose the money that is now your debt, but can also lose the family member over it.

You hear it all the time, how my family menber would never do that, until they do it.

Good luck with it. I hope you two find some way to move forward.
Message 6 of 9
marty56
Super Contributor

Re: cosigned on student loan

I believe that they cannot garnish your social security and I would ask a lawyer if they can garnish your pension.  On the home, it may depend on what state your live in but IMHO a lien on your home is only important if you want to sell your home.  I live in Texas and no creditor (other than the mortage company or state - taxes) can take your home.

 

I know it is a lot of money but if you could transfer the debt to unsecured debt that would at least protect you in a BK situation.

 

I feel for you and your situation. 

 

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Message 7 of 9
GrowingWiser
New Visitor

Re: cosigned on student loan

Hi, all.  Lke in other areas, I learned a painful lesson (emotionally and financially) about ever co-signing a student loan for anyone. About ten years ago, an online instructor (who happened to live, with his family, about ten miles away from me), began inviting me to his house for dinner with the wife and "children."  We talked about various subjects, got to know each other. Once a week, his wife would cook a great meal for me.  After a while, the teacher brought up an area of deep concern to him:  his youngest son, unlike his other children, would not be able to return to college the coming year.  CIrcumstances had harmed their credit and nobody could help them. What was he going to do?  It was breaking his heart.  (Background:  the family was aware that my son had died in an accident at age 12.)  Then, the family began sharing with me the very sad, tragic story about their oldest daughter. She needed more surgery -- on her brain. The doctor wasn't sure she would survive the surgery, and medial expenses were bankrupting them. Plus, their youngest was unable to return to college. I was told heart-wrenching stories. "If someone could just help us for one year, it would get us through this time."  I walked right into and through this open door, thinking I was doing the kind and honorable thing.  I volunteered to co-sign for one year of their son's student loan, so he could complete college.  It took the family approximately 14 seconds (hyperbole) to put toether the paperwork. "Don't worry," the father said. "Probably within a few months, after our daughter's brain surgery, we will be able to take over this studen loan ourselves and you'll be out of it."  The day after the paperwork was signed and the loan went through, I was invited to what would become my last "family dinner" -- the proverbial Last Supper.  It was then I met the daughter preparing for brain surgery, when she came home earlier than expected.  We were alone together (the il daughter and I) so I asked her if she was worried, scared, etc. -- how she felt about the upcoming surgery.  She looked at me like I had two heads.  "What are you talking about?" she said, looking truly confounded.  Enough of a long story getting longer.  I got duped.  Had.  I knew enough to stay on top of the loan.  Within a few months, it was clear that the family and I "were done."  In a phone conference, both the father and son made it clear that they had no intention -- none whatsoever -- of either getting another co-signer, or of paying off the loan.  They were aware that the bank would come after me, because I was the one with the credit. My best guess is that this "system" is how the family funded their children's education, but I don't know.  I do know that after the family made it clear they had no intention of paying a penny on the loan, I paid it off in full. It had always been my dream to have an Air Stream Trailer, which I had purchased recently.  It was a luxury, although I was able to use it for business.  I sold it and used the funds to completely pay off the loan.  Not everyone will go to these lengths to wrangle funds for a child's eduation.  But it doesn't matter.  The answer should be the same.  In the words of one famous First Lady, "Just...Say...No."  If one person can learn from my experience, I will be grateful.  Kind of.  Sometimes, when I drive by their street, I wonder how the son feels, knowing that he "stole" his education.  I wonder about that spiritual thing we call Karma.  I know I'd feel guilty, if I did this to someone. Never say never (or so "they" say), but it's not my way to take other people's money.  For me, it's not just the "thing" or the money that matters; it's the manner the money was acquired that matters and affects me deeply.  But, I need to remember that we all have different approaches to life, and money.  Thanks for listening.  I know I have no recourse. (And no, I wasn't thanked for helping the son graduate, or complete his education.)  The amount, out of pocket?  About $27,500.  After talking to others, I now realize that committed, dedicated people will find a way to legitimately fund their college education.  If someone "has to have someone," or if that person is absolutely desperate and I'm their only recourse or solution, then something is wrong.  Better to lose a false friendship, then lose a huge chunk of money and a false friendship. I feel badly for the children, because the true education they gained from this is that scamming, manipulating, lying, cheating and ultimately stealing are "the best way to go."  In the end, I'd rather be me. 

Message 8 of 9
Rikku
Regular Contributor

Re: cosigned on student loan

Both of these stories are heartbreaking. While I agree that people should use caution when cosigning a SL or any other type of debt, I also urge you to be realistic. Think critically rather than blindly signing on the dotted line. Who are you considering cosigning for? Is this person responsible? In the case of a SL, will this person apply themselves enough to graduate? How is the job market in the field that he/she is studying?

 

My dad cosigned for my SLs so I could go to graduate school. I have never missed a payment, even in the early stages of my career when my salary was low. If he hadn't cosigned, I would probably still be in school part-time, trying to finish my graduate degree one class at a time - instead of 7 years into a promising career. Same thing with my husband - his mom cosigned and he's never missed a payment.

 

I'm not saying that everybody should cosign for their children's SLs. Be honest with yourself - you'll know in your gut whether or not it's a good idea. I would recommend that students explore all other possible ways of funding their education before taking out private loans, but if it's inevitable, your responsible child is not necessarily going to screw you over. Just be honest with yourself about whether your child is responsible and whether they will have the means to pay back the loan after graduating.

Message 9 of 9
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