Should I Just Let My Cosigned Navient Student Loans Go to Collections and Try to Settle them?


Dear Steve,

I am. a cosigner on a student loan of my daughters with Navient. She has 3 loans with them. One I am cosigned on she has been paying income based on these for years and of course, the principal goes nowhere.

She is 2 months late, Navient is going to turn all 3 to an outside collection if payment isn’t received in the next week.

She is not employed and is trying to get disability. I am employed and own a home with my husband. Not her father my marriage occurred years after the fact.

I file my taxes married but single because of these loans. I currently am paying 306 a month on federal parent plus loans for this same college education of hers. I don’t know if I should just take the hit and let it go to collections in which case she intends to settle at a much lower rate at a buyout or if I am going to be stuck paying on these indefinitely until the day I go to my grave. Please advise.

Should I just let my daughter’s loans that I am cosigned on with Navient default and go to outside collection ad settle then at a lower rate even though it will hurt my credit.



Dear Laua,

It is not clear if the Navient loans are private but for the sake of my answer, I’m going to assume they are.

When you cosign for a loan you are entering into an agreement with the lender where you guarantee the payment if the borrower fails to make the payments. You have 100 percent of the liability and zero percent of the benefit. The only person consigning is good for is the lender.

If you let the loans go to an outside collection agency they could have big fees and penalties added to the loan balance. And while Navient private student loans can be settled, the real secret is knowing who to ask and when the best time to ask for a settlement is. There is some skill in dealing with Navient and other private student loan lenders to get the best deals.

See also  I'm So Stressed Being a Sallie Mae Cosigner. I Want to Be Removed. - Ronda

I would suggest you get a second opinion by talking to my friend Damon Day about your specific Navient loans. He can confirm the loans are indeed private loans and consult with you about a strategy in dealing with the specific loans. It is also important to have a discussion about the pros and cons of going for the settlement. It may not be a pain-free process.

In talking to Damon Day it is also important to discuss who is really settling these loans, you or your daughter. If you just wanted to get off the private student loans it is possible to settle for a cosigner release. But for a bit more money the private loans can be settled, typically.


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Steve Rhode is the Get Out of Debt Guy and has been helping good people with bad debt problems since 1994. You can learn more about Steve, here.
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