Question:
Dear Steve,
I co-signed on a SallieMae loan for my son. SallieMae is now operating as Navient. Six months before he was scheduled to graduate, Navient began calling me when my son wasn’t able to make payments. I was told that because I was a parent who co-signed and he would be graduating soon, the payments were due. Payments are $400 per month. My son is working part-time and he’s still taking classes, which makes me responsible.
I have been receiving notices in the mail and reading articles like yours regarding Student Loan Relief program. Although I co-signed on this loan for my son, is this program something he can benefit from? It’s my understanding that because he is the primary borrower that only he can inquire about the Student Loan Relief/Debt Forgiveness program. Or is he not eligible since he has a co-signer? I’m paying it every month, albeit several days late, but I have my own bills and still have more than $25,000 left to pay off. Any advice is appreciated.
Dee
Answer:
Dear Dee,
Since you say you cosigned for these loans they must be private student loans. Federal student loans do not allow cosigners but instead do allow the parent to take a Plus loan out and use the funds for the educational expenses of the child.
So on the presumption these are private student loans, you are basically out of luck.
A private student loan does not have access to forgiveness programs like federal loans do. They are actually most related to regular consumer loans than a federal student loan.
As the cosigner you are 100 percent responsible for the loan and payments. Any payment performance will be reported on your credit report. So if your son does not pay it will hurt your credit as well.
The private student loan holder is generally unwilling to provide you with a payment modification. Even if they did, they tend to only offer a forbearance or deferment option which explodes the total balance due. So it puts you deeper in debt you can’t afford.
At this time your only real option is to default on the private student loan payments to attempt to get to a point where you can negotiate a reduction of the debt owed so it is affordable. If the circumstances warrant it, you might be able to reduce the debt in a specialized bankruptcy filing. You can see Top 10 Reasons You Should Stop Paying Your Unaffordable Private Student Loan for more information.
A solution that can make perfect sense would be to consider filing bankruptcy to discharge your own unsecured consumer debt and make room to make the private student loan payments. It might sound crazy but it is a legitimate legal solution to help you make the private student loan payments if you are unwilling or unable to take other action.
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