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Co-signing Your College Student Loan
There millions of students from 20 to 40 with student loan debts. Many were unable to get grants for college and most went to private banks for a student loan. So far, so good. However, the problem is that most of the private sources for student loans require a co-signer. In most cases, that person is the parent of the student, and if the parent has no clue about what a co-signer means (as many have), in a nutshell, it means if your son or daughter defaults on making the payments, the parent is on the hook to pay it.
So, what has happened is just that. Millions of students got their degree and no longer can afford to make the high monthly payments and suddenly the parents, 50+, have another $600 to pay for the student loan. Student loans of $55,000 will cost $550 a month payment. The student loan dilemma has now reached a a trillion dollars in debt. Some two million over 60 yrs. owe $43 billion. Ninety percent of the student loans now require a co-signer.
Imagine being 27, with a new degree, or old degree, and having to pay $850 a month. There is worse, some students have loans that require $1200 a month payment. Imagine a parent, now 55+, having to co-sign a student loan for their kid that comes to $55,000. Maybe it is just for a dental assistant job after the school. The student begins her career barely making $15-20 hr. and most of her usable income goes to the student loan. It is only a matter of time until the parents will be strapped with the loan at a time when it is not needed for them. Now, add to the mix of unforeseen events, health problems, or maybe the grandparents needing assistance or money.
You may love your kids, but really think about co-signing any student loan!