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Co-signing Your College Student Loan

Updated on October 27, 2012

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!

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    • LindaSmith1 profile image

      LindaSmith1 

      5 years ago from USA

      The reality of student loans is that they are like charging your tuition on a credit card. The day you graduate, job or no job, payback begins with the interest compounding daily.

    • LindaSmith1 profile image

      LindaSmith1 

      5 years ago from USA

      The really PIA is if the loan goes to default, the Gov't then sells the loan to an outside company, and the Gov't has no idea, or claims to have no idea as to has the loan now. It's a racket.

    • Kathleen Cochran profile image

      Kathleen Cochran 

      5 years ago from Atlanta, Georgia

      Linda: You took the words right out of my mouth. Then trying to get those companies to send you a history so you can make an attempt at tracking the twists and turns to loan has taken, they can't even provide it. I'm about to write my congressman on this. If there is a topic they should hold hearings on, it's this. Tuition is through the roof. Graduates can't find jobs. And loan companies are playing bait and switch with their paperwork.

    • LindaSmith1 profile image

      LindaSmith1 

      5 years ago from USA

      The loan get resold over and over. These companies don't even bother to send notices, until what could be a year, 2 years, whenever they feel like it while the interest at an astronomical rate piles up. Student loan program was one of the biggest govt rip offs for Americans.

    • Kathleen Cochran profile image

      Kathleen Cochran 

      5 years ago from Atlanta, Georgia

      What we have run into is that student loans are sold and sold and sold again just like mortgages. Keeping up with exactly who you owe money to is a problem exaserbated by the fact that all the past due notices go to the student. We've been keeping up with payments until our son went to Afghanistan for a year and the loan got sold so nobody recognized the notices that got lost in the avalanche of mail that piled up. You'd think they could send a email in this day and age. Beware.

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