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Home > Reader Questions > We Cosigned for Some Student Loans for a Friend. How Do We Get Released? – Michael

We Cosigned for Some Student Loans for a Friend. How Do We Get Released? – Michael

My wife co signed for some student loans for a friend a few years back. Now that we are married it has come back to haunt us both personally and financially. The bank and student had originally told my wife that she could be let out of the co sign. Now sallie may says no. The student is willing to cooperate in anyway to get us released.

My question is: How do we get released from this loan. Is there someone I can hire to consult us? I am looking for someone to help the student consolidate her loan and get my wife released. There is paperwork from sallie may that says she is allowed to be released from some of the loans provided the student pays 24 consecutive payments, however when she called they refused. She has no one else to cosign another loan. Who or what can we do? I think the only answer is to have the student consolidate, but I need to find someone that can help us with this process in having Sallie may keep their word on the loans they promised to release the co signer from and also to consolidate the rest of the loans getting my wife off as co signer. I am willing to pay for that. We are in the NYC area.

Thanks so much.

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We Cosigned for Some Student Loans for a Friend. How Do We Get Released? - Michael by

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  • Laura

    What if you KNOW that the original signer’s spouse works but she won’t submit the information to Sallie Mae? They don’t make enough to make a full payment; however, they could make it on the reduced payment plan. Sallie Mae opted to garnish MY husband’s wages before hers because she won’t admit he works. Isn’t there some law against that? She’s in California, so by law, his income is counted as hers as well.

    • http://GetOutOfDebt.org Steve Rhode

      As far as I’m aware, the lender is not required to exhaust all means necessary to go after the beneficiary if they think the cosigner is an easier target.

      You’d have to discuss your specific situation with an attorney licensed in your state.

  • http://twitter.com/questam70 Alicia Morrell

    I have the same problem. I have been paying on my sister’s loan for 5 yrs and Sallie Mae keeps giving me the runaround.I cannot tell you how much I hate that company. My sister refuses to talk to me about and ignores all requests to have me removed. I could kick myself for cosigning and will never do it again.

    • http://GetOutOfDebt.org Steve Rhode

      Yea, They are not going to remove you unless she refinances the entire amount due. Sallie Mae is going to keep the better credit risk person obligated till the loan is paid off.

      The rule of cosigning is to never cosign. You get all the responsibility and none of the benefit.

  • jpumpkin

    I have a similar problem, except I’m the borrower and my mother is the co-signer. 

    I have two loans with Sallie Mae 
    1.  Original balance $10,500 Cap. interest $2,227.78 Total $12,327.78 at 5.25% started repayment June 2010 and today’s balance is $3,742.87

    2.  Original balance $104,979.92 Cap interest $1,126.08 Total $106,106 at 4.75% started repayment Jan 2008 and today’s balance is $92,770.37.  

    Since I consolidated the 2nd loan I received no grace period, therefore I had to start making payments immediately upon graduation.  I was unable to do so at the time because I was only working part-time and filed for forbearance.  Since then I have paid over $40,000 to Sallie Mae, my credit score is around 780 and they denied my request to release my co-signer.  Should I keep filing?  What else can I do?  I do have life insurance just in case. 

  • Trudy

    Hi Michael,
    I feel for you and your wife. I know how hard the situation can be. I am in a similar situation as I co-signed student loans for my son who has now defaulted. Myself being disabled now am unable to pay on the loans. I was told by Sallie Mae that I could be released by submitting paperwork from my physician stating I was permanently disabled. But then the Sallie Mae changed their standing and I said I could not be released because the loans were private student loans. It’s been a very frustrating situation. I hope you and your wife are able to get some resolution from Sallie Mae. Good Luck.

  • NDV

    I’m on the other end of this issue.  I allowed my mother to assist me in cosigning a loan from Sallie Mae which consolidated my private student loans and now her credit is completely tied up in the loan and I cannot release her.  I feel so guilty that she cannot refinance her house or cosign student loans for my sister to consolidate (or go to graduate school) and speaking to Sallie Mae is a terrible, awful, spiraling run around.  I don’t know where to turn.  If you find out, let the rest of us know!  If I’d have known I would be financially imprisoning my mother, I never would have let her sign the cosign!  

    • http://GetOutOfDebt.org Steve Rhode

      How much do you owe on your student loans?

      • Moccha

        My nephew owe 26,000 and I am the co-signer.

      • http://GetOutOfDebt.org Steve Rhode

        If you are the cosigner then you are 100% liable for the loans if he does not pay.

  • Msullivan

    Wow, this is an easy one. If you really have a written agreement stating that the co-signer is to be released after the borrower makes 24 timely payments and you have proof that the borrower made the 24 payments with no other defaults, you have Sallie Mae committing a breach of contract and you need to hire an attorney and sue for damages and costs. A good, aggressive attorney might really clean  up.

    Of course you need to be sure that you are reading the contract correctly. Large companies usually understand the risk of violating an agreement and don’t like writing the big checks when they do. Your attorney will advise you if you missed something, but you will pay the legal fees if you are reading the agreement incorrectly.

    The real lesson here is never cosign for a loan unless you are prepared to pay it off. I hope you can get out of this and I would appreciate it if you would let us know how it turns out.

    Good Luck!

    • nylord1

      unfortunately, she stopped payments and went into forbearance for awhile and is now back to paying them. We don’t have the contract, just a letter stating that some of the loans could be released after 24 payments. The other half of the loan we still need to figure out who to speak to to help consolidate her loan to get my wife off the cosign.

      • Msullivan

        Oops. That does change things. Are these government loans or private loans?

      • nylord1

        trying to find out but i think private.

      • Msullivan

        If they are government loans the entire process is fairly transparent. Go to http://www.direct.ed.gov and you will find a link to consolidation. Follow the process and you find out if you qualify and how to do it.

        Unfortunately, you probably do have private loans. Most government loans do not require cosigners and your situation smells like private loans. The bad news is, you probably have no way of getting the cosigner off that loan until the applicant’s credit rating is sound enough to get that credit independently. There is really no reason for the lender to remove that guarantee so long as there is any doubt that the lender will be able to repay the loan. Since the lender requested an early forbearance (not a popular thing for private loans) the lender is probably concerned.

        I’m guessing you are stuck for a number of years.

        Sorry. 

      • nylord1

        what if the student who is working full time now (although credit is not good) was willing to pay extra points on the loan in order to get it consolidated without us?

      • http://GetOutOfDebt.org Steve Rhode

        The lender doesn’t want to let go of the party with better credit that qualified. They’d have to refinance the loan and pay it off. Depending on the balance look at LendingClub.com or Prosper.com for a loan.

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