I have a similar situation with Sallie Mae. This is what they told me. They said after 24 months of on time payments (no late payments past 45 days) regardless of whether I paid or the primary borrower paid that I would be eligible for a release off the loan. At that time I could send in a cosigner release form and they would evaluate the primary borrower's financial situation to determine whether or not he could carry the loan by himself. They said they do this by checking his credit and following up on his current job to check his debt to income ratio and see if he can afford the payments. If they deny me they said I could send another one in six months after and then if I keep getting denied I can send one in every three months until approved. The Sallie Mae representative couldn't tell me how often this happens...Then they told me that I wasn't even eligible for all that because my ex never finished school....awesome. I didn't buy any of it personally. Think about it, they already have you on the hook why would they bother releasing you off the loan when they could have two people to go after instead of just one? Also there is no way they are guaranteeing you are released off the loan if they have had previous cases where people have had to send multiple requests after being denied. I think this is just something Salle Mae tells you to reassure you so you can sign the line.
Thank you for this message, I am a similar situation but have a question. I cosigned 3 loans - one for my daughter and two for a FORMER close friend of the family, all of which are presently in default. The one for my daughter is in default due to her sickness after graduation, I fully expect now that she is getting on her feet that she will pay hers. As for the other two, I realize that I will need to begin paying something back on these, but I'm wondering is it necessary to deal with the collection people, or can I deal directly with SM? Also, the income I had when these loans were cosigned is now gone; I am willing to pay but certainly wouldn't be able to afford to pay what they are asking.....are there any ways of lowering the payments? I realize I'll be paying for this mistake for the rest of my life as it is. Also, another question - once you begin paying the loans back, how soon can you expect any improvement to your credit score? This has devastated my once perfect credit; I need to make home improvements but don't dare approach a bank for financing.
Thank you very much - the lesson has been learned, DO NOT COSIGN. PLEASE. No matter what they say to you, don't do it!!!
I would agree with everything that everyone has said , with one exception if you decide to co-sign for a loan you need to consider it your loan and keep tabs on it to ensure it doesn't effect your credit. I co-signed for my son's student loan. My intentions at the time of co-signing for his loan were and still are to either make a payment every month and ask him to do the same or just take over the loan myself and not ask him to pay a dime. Hopefully I'll still feel the same way when everything is said and done.
I wouldn't bank on 24 months of payments releasing you from the co-signer responsibility. Posts elsewhere on the internet indicate it is offered by Sallie at its own discretion when a borrower has made the first 24 P&I payments according to the agreement. Releasing a co-signer only makes sense when the borrower has demonstrated he is a responsible debtor and the associated credit risk is less than the typical student loan (graduation and payments being good indicators). A borrower who has defaulted, necessitating collection from the co-signer, clearly lacks that credit risk profile. If the other internet postings are accurate, it doesn't look like you would meet Sallie Mae's condition for consideration, a borrower who has made 24 timely payments. From Sallie Mae's perspective, it would be reckless to release the one performing source of repayment two years into a multi-year contract. I'm sorry that you agreed to be a surety for someone who proved himself not equal to your trust in his meeting obligations. Sallie Mae apparently saw that risk and sought a reliable source of repayment. Theirs was a rational decison. not an emotional one.
Personally, after similar experience I now consider all familial loans as gifts and am pleasantly surprised when they are repaid. That avoids a lot of diappointment and rancor.
Sallie Mae told me the same thing about the 24 month rule, but when I hit month 18 and asked how to get off, I was told in order to be removed the original borrower had to have a good credit rating so now I cannot get off this loan. I continue to pay on time however it is killing my credit rating.
I second what hobby38y says. If you do cosign, make sure that you actively monitor the payments that they make. I've cosigned for both of my kids, and for the most part they make the payments on time. But they've both been late before, and I had to kick them in the butt to get them to mail in the payment before it affected my credit rating. I learned the hard way when in the beginning I trusted them to make payments and they both missed one within a 2 month span. I didn't know until it was too late and I had 2 - 60 day late notices on my credit report. This was prior to me signing up for MyFico, and a big reason why I did sign up for the monitoring service.
The same happened to me except I was not pro-active enough initially and over a period of 3 years my brother kept asking for deferments and my total grew close to 8,000 dollars above the original loan amount! I thought it was getting paid so I never thought about this account until one day I get a call saying it's 90 days past due. Well long story short I too accepted I had to make payments for the 24 month period and began doing so. However, about 6 months into it I got a letter from sallie mae and they told me my account would not be eligible because the account was 90 days past due at one point and that would disqualify me from this program. So read further into the fine print and never, ever, EVER co-sign for anyone. This was my own brother who did this and were close so how do you like that!
Yes! I also made the same mistake! I co-signed for a daughter of my cousin and she has mounted $20,000 interest on $60,000 loan. Now it is $80,0000 loan. She defaulted and distroyed my credit and my life. Yes, You are very correct! Do not ever make this mistake. This woman and her father has kept on lying month after month. All I can do now is pray God that she pays off the loan! May God protect the innocents from these kind of idiots who take advantage of our generousity and emotions! When this woman wanted me to co-sign, she was even sending me e-mails like I was the only best person for her in this entire world. She has yet to call us for past 3 years!
Through my college years, my mom cosigned on my car and, due to a mix up, took out three Parent Plus loans. I paid off the car and had every intention of making sure that she never felt sorry for signing for anything for me. As a bittersweet note, she has been found to be permanently disabled due to a medical condition and these loans must be forgiven as a result.
Regardless, I could never imagine betraying her by not making payments. My auto payments were never late for the entire life of the loan. Although the OP's son went for higher education, he didn't learn how to be an adult along the way.
Perhaps ironically, I wouldn't cosign on anyone's loan.
For those of you in this situation, perhaps you should sue the "student." Contact an attorney in your state to discuss what cause of action you would have. I imagine that you should at least have a claim in equity for unjust enrichment. Even if they do not have money now, it may be best to get a judgment which can give you a senior claim to assets they may not have acquired yet. At the very least, you can punish them for what they've done to you.