Cosigning Student Loans - Learn From My Mistakes - Please Read

[Miscellamy]

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 Maybe each year evaluate their finances and if that person is abuses it make sure it's understood the cosigner agreement will be over.

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Unfortunately, this is NOT the way it works. Once you've taken on the legal obligation to backstop someone's debt, only the lender can end that obligation. You can't just say, "hey, this guy isn't being as responsible as I'd hoped -- I'm out." From the lender's perspective, that's all the more reason to keep the cosigner. Once you cosign, you're almost certainly on the hook for the lifetime of the loan. Look at my anecdote: it's almost impossible to get cosigners released even when the primary borrower is meeting all of her obligations. 

[Anonymous]

Sorry that wasn't clear. I'm a college student and I know some people take out more loans then they need, for example the cost of attendance says food is like 600 dollars a month. If you skip a meal plan you can definitley budget and make 100 dollars a month work for food. I meant for the next year.

So as a cosgienr you cosign a loan for someone after ALL OTHER OPTIONS HAVE BEEN USED. You make a personal agreement with them. You make sure they work and they pay the loan while they go to school. You no longer will cosign for them to finish their education if they do not continue to show responsibility.

When I read people saying their own kids burned them it makes me realize the different relationships between parents and kids. I think every parent knows the kind of relationship they have with their kids. If your kid has showed over and over they aren't responsible with grades, and money perhaps I understand not cosigning. But if your kid works super hard and makes great grades, works (especially during school breaksk and alot on the weekends) and is willing to make some sacrafices (live like a broke college student) I would reccomend cosigning a loan. As a parent you want the very best for your kids, you want them to have the best educatin possible and depending on their course of study the college itself makes a huge difference. The federal government says that education is a parents responsibility until age 24. I especially think parents should cosign if the parents income is what is keeping the child from getting more loans in their own name (too high of an income etc.)

[Anonymous]

I've found that 20-30somethings have a different view on debt than the 50+ generation. Living within your means does not seem important....I'd rather have it now and pay later is the status quo.

How about work for 5 years after school and save up for your 1st year then borrow on your own name for the rest or go to community college for core courses? Go part time and pay as you go, middle class families cant afford to pay for college education.

Some where along the years younger generations seem to think its the parents obligation to pay exorbantant tuitions because kids want best schools that are out of parents budgets.

My kid borrowed this 13 years ago and sees no issue with me carrying a $42,000 debt on my FICO which contributes to my debt to income ratio because she makes her paynents on time. Doesn't matter I'll be 97 years old by the time its paid.

After raising kids to adulthood is it really a parents JOB to pay for or cosign for student loans and continue paying till death do us part?

[InvincibleSummer3]

No one is owed a college degree; the federal government takes parental income into account when awarding financial aid packages but that's a far cry from "parents are responsible for education until age 24". No one is entitled to a college education, and no one should be forced to take on debt for someone who isn't a minor child.

You can talk about the morality of parent's decisions all day long, but the reality is that each situation is unique. I'm one of those parents who will not, ever, under any circumstances, cosign an education loan. I love my daughter, but I've been clear with her that there is no money for college and if she wants to go she'll need to get very smart about how she wants to proceed. Her father's income is high, but it's unlikely he's going to want to jump in, and there's no way to force that. It took ten years just to get child support from him, and that IS federally mandated. Still. There's scholarships, there's community college, there's certain schools that can offer more attractive financial aid packages....or maybe she does what I did and works a few years until she's over the age of 24. There are lots and lots of options, but I am not raising a child with an overgrown sense of entitlement. I'll be there to help in whatever way I can, but co-signing a loan just isn't going to happen. You never know what kind of financial hardship could affect someone's ability to pay that back, as you've seen on this very thread.

[GoldSorata]

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@Anonymous wrote:

Sorry that wasn't clear. I'm a college student and I know some people take out more loans then they need, for example the cost of attendance says food is like 600 dollars a month. If you skip a meal plan you can definitley budget and make 100 dollars a month work for food. I meant for the next year.

So as a cosgienr you cosign a loan for someone after ALL OTHER OPTIONS HAVE BEEN USED. You make a personal agreement with them. You make sure they work and they pay the loan while they go to school. You no longer will cosign for them to finish their education if they do not continue to show responsibility.

When I read people saying their own kids burned them it makes me realize the different relationships between parents and kids. I think every parent knows the kind of relationship they have with their kids. If your kid has showed over and over they aren't responsible with grades, and money perhaps I understand not cosigning. But if your kid works super hard and makes great grades, works (especially during school breaksk and alot on the weekends) and is willing to make some sacrafices (live like a broke college student) I would reccomend cosigning a loan. As a parent you want the very best for your kids, you want them to have the best educatin possible and depending on their course of study the college itself makes a huge difference. The federal government says that education is a parents responsibility until age 24. I especially think parents should cosign if the parents income is what is keeping the child from getting more loans in their own name (too high of an income etc.)

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When you have more life experience we can see if you still have the exact same viewpoint

I have 3 kids and want the best for them. But my experience with education and life has taught me that putting one into financial risk over education loans is not worth it.

[Anonymous]

My parents don't make much money at all. My mother is unable to work, and both of my parents are from east africa (Eritrea specifically) and didn't attend college themselves. They had family to take care of and never thought about starting a college fund for me. My dad has such a low income that neither of my parents could cosign for me but if they could they would in a heartbeat. I was blessed enough to receive a full ride merit based scholoship. I personally can't wait to graduate and actually help my parents out. I help now, I have a full ride at my college, I live on my own but I also work a full time job and do whatever I can to help. My parents hate to take anything from me, but I do things like bring groceries or pay for my dad to get tires.

I say all this because I'm trying to express each situation is different. If you are in a position to cosign for a child's loan, why wouldn't you do it? Sure, working until the age of 24 is always an option and she can try to improve her credit and get her own loan, but in my opinion it's hard to find a well paying job without a college degree or a lot of work experience. Community college and working is always an option, but what about kids who work really hard in high school and make excelent grades and get into really selective schools that have a great program for what they are studying. Going to community college first means they will have to re apply and I know for a fact many colleges take very few community college transfers (not state schools).

Again this is where it varies by the situation. I don't understand why so many parents are completely against cosigning a loan in any circumstance. Why not set certain conditions? What about how well the child performed or how responsible the kid has been. I think the philosophy of the U.S is that parents are responsible for most of the college education costs if they make above a certain income. It doesn't matter if we disagree, I'm simply explaining how its set up. If your a parent who makes so much that your kids can't get some grants, it makes sence to cosign on a loan doesn't it?

[Anonymous]

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@GoldSorata wrote:

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@Anonymous wrote:

Sorry that wasn't clear. I'm a college student and I know some people take out more loans then they need, for example the cost of attendance says food is like 600 dollars a month. If you skip a meal plan you can definitley budget and make 100 dollars a month work for food. I meant for the next year.

So as a cosgienr you cosign a loan for someone after ALL OTHER OPTIONS HAVE BEEN USED. You make a personal agreement with them. You make sure they work and they pay the loan while they go to school. You no longer will cosign for them to finish their education if they do not continue to show responsibility.

When I read people saying their own kids burned them it makes me realize the different relationships between parents and kids. I think every parent knows the kind of relationship they have with their kids. If your kid has showed over and over they aren't responsible with grades, and money perhaps I understand not cosigning. But if your kid works super hard and makes great grades, works (especially during school breaksk and alot on the weekends) and is willing to make some sacrafices (live like a broke college student) I would reccomend cosigning a loan. As a parent you want the very best for your kids, you want them to have the best educatin possible and depending on their course of study the college itself makes a huge difference. The federal government says that education is a parents responsibility until age 24. I especially think parents should cosign if the parents income is what is keeping the child from getting more loans in their own name (too high of an income etc.)

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When you have more life experience we can see if you still have the exact same viewpoint

I have 3 kids and want the best for them. But my experience with education and life has taught me that putting one into financial risk over education loans is not worth it.

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I'm trying to see this from the collective view of this thread, but I feel like because I am in college I have a good perspective. I mean we have to take into consideration what the child is studying. If they are pre-health for example, it's going to do them alot better to go to a school that has a great pre health program and those are usually private schools. I'm not saying everyone shoudl go to private school, but I think in some cases the benifit outweighs the cost. How else is a child supposed to fund their education if it will help them to go to an expensive school? They can work summers through high school, they can even work part time in college but a loan will still be needed even if they get a good amount of scholorships and financial aide.

Maybe my views will change but when I have kids, I do hope to start them a college fund. If for some reason I'm not able to do that, I don't see why I wouldn't cosign a student loan for them after trying every other option including some loans in their own name.

[SCF]

The decision to co-sign a loan lasts generally 10-20 years.  A lot can happen to a relationship with a child and all the factors (personal responsibility, willingness to sacrifice, outside factors like the economy, illness, etc.) that contribute to whether a person successfully repays their debt.  A lot can change in the parent's willingness and ability to co-sign the debt in that time as well.

A co-signer may see their income decrease, and then be unable to get a mortgage or car loan because of their debt-to-income ratio, 10 years after the initial decision.  They may also find themselves being sued for a debt they could support 10 years ago, but now that an economic downturn or illness has impacted both their ability to earn and their child's, they're stuck with garnished wages and a judgment on their credit report.

You don't make this decision just for your current self and situation, you make it based on what you will wish you had done 20 years from now.

[steel_string]

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@Anonymous wrote:

I'm trying to see this from the collective view of this thread, but I feel like because I am in college I have a good perspective.

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That's precisely why you don't have a good perspective. You haven't had to make required loan payments while paying rent, fixing a car that suddenly failed, attempting to make the numbers work in order to own a home, etc. And if the situation has already gotten so bad that the student needs loans that require a cosigner, the situation is already beyond hope for the large majority of them. Student loan debt can wreck your life. If you cosign for someone, it can wreck both your lives.

Will there be exceptions? Sure. Doctors can often handle the debt and lawyers sometimes can. But in those cases, nobody really cares where you went to undergrad, anyway.  Save money there, borrow for your professional school, and pay things down as aggressively as you can. For everyone else, the situation is pretty dire by the time you start looking for cosigners.

[Anonymous]

That's precisely why you don't have a good perspective. You haven't had to make required loan payments while paying rent, fixing a car that suddenly failed, attempting to make the numbers work in order to own a home, etc. And if the situation has already gotten so bad that the student needs loans that require a cosigner, the situation is already beyond hope for the large majority of them. Student loan debt can wreck your life. If you cosign for someone, it can wreck both your lives.

Will there be exceptions? Sure. Doctors can often handle the debt and lawyers sometimes can. But in those cases, nobody really cares where you went to undergrad, anyway.  Save money there, borrow for your professional school, and pay things down as aggressively as you can. For everyone else, the situation is pretty dire by the time you start looking for cosigners.

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I'm going to have to disagree. Tier one law schools and medicals schools are extremely competitive. It makes a huge difference if you attend an college that's got a tougher curriculum. I'm a nursing major, I eventually want to do nurse anesthesiologist and in they do consider where you went to school. For example, the program at TCU looks down on taking any science classes at community college and you get bonus points on your application for having been an undergrad at TCU.

The other thing is the connections you make at some school will literally benifit you. If your in a major that's difficult to find work in your field right now like social work, or sociology but you go to a small private school they literally put in so much more effort to help you find a good paying job then a big state school would generally.

I'm not sure what you mean about being in trouble and needing a cosigner. Right now, it's really hard to get a private loan as a student even if you have excellent credit. I know usually you need five lines and two years of history at least, kind of hard for an 18-20 year old to have. Also some of the grants, scholorships and financial aide loans are NEED BASED so if your parents make over a certain amount, it keeps you from qualifying for those until your 24. I'm not saying you shouldn't be careful when considering cosigning a loan, I just can't imagine having kids and automatically saying no to cosigning their loans without analyzing the bigger picture. People keep saying in no circumstance would they cosign, I mean really?