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Cosigned for Student Loans. What Are My Options Now? – Scott

By on June 16, 2011
Cosigned for Student Loans. What Are My Options Now? – Scott

“Dear Steve,

My son graduated high school 2002, went off to college at Milwaukee School of engineering. I was making in the low 6 figures and was not living any extravagant lifestyle, so I had no problem co-signing for his student loans. Well after 4 years of going to school and then giving up… he is or I should say we are $100,000.00. Now add a divorce in the mix back in 2007 and loosing everything, plus I owe the exwife $100,000.00. My son has defaulted on the loans and I also have lost my job so I don’t have any money to pay the student loans. Because of the student loans that I was paying I have moved in with my mother to avoid making a house payment.

My question is…. what are my options with the student loans???

Scott”

Dear Scott,

No there is a situation that sounds like a country song. (Grin)

Hopefully these are government backed loans. If so the first step should be to call the servicer handling the loans. Give them a call, explain the change in circumstance and post an update in the comments about what they say.

We’ll take it from there.

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READ  My Granddaughter Left College Just Months Before Finishing. I Cosigned.

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About Steve Rhode

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.

5 Comments

  1. Jenny

    October 11, 2013 at 10:10 pm

    I have a similar issue but with a twist..the loan I cosigned apparently will not release me until my son graduates however he decided to drop out, he is currently working but chooses not to pay or put himself in deferment. ..I on the other hand have hit some hard times my husband lost his job and was able to recently find one but it pays him less than he was making before. To make a long story short I cant afford to pay my sons loans and he doesnt care …do I have options? Can I take him to court or anything considering he has the means to pay just not the desire to do so… help please

  2. Steve Rhode

    June 16, 2011 at 4:45 pm

    Scott,

    To pile on the irony the student loans were undertaken in an effort to wind up doing better in life.

    The good news is that once you can regain some of your lost income, and you get back on track making student loan payments, after 12 consecutive payment the negative marks should be removed from your credit report.

    Keep me posted how it goes.

  3. Scott

    June 16, 2011 at 3:13 pm

    Steve, Trust me, it makes me sick to see 100k thrown away with no degree to show for it. Anyways, I believe the are private backed loans through The Student Loan Corporation (backed by Citibank). He has one other loan that is through Sallie Mae that he is trying to take care of himself.
     
    Obviously since he has defaulted on the loans and the fact that I can’t pay them now because of unemployment, the loan defaults have been reported to the credit agencies and they are on my credit report. So with that being said, for me to get a job that pays enough for me to pay these loans I am screwed because now I have bad credit too! So now I am between a rock and a hard place…… got to love how ironic all this is.
     
    Any suggestions?
    Thanks!Scott

  4. Scott

    June 16, 2011 at 7:13 pm

    Steve, Trust me, it makes me sick to see 100k thrown away with no degree to show for it. Anyways, I believe the are private backed loans through The Student Loan Corporation (backed by Citibank). He has one other loan that is through Sallie Mae that he is trying to take care of himself.
     
    Obviously since he has defaulted on the loans and the fact that I can’t pay them now because of unemployment, the loan defaults have been reported to the credit agencies and they are on my credit report. So with that being said, for me to get a job that pays enough for me to pay these loans I am screwed because now I have bad credit too! So now I am between a rock and a hard place…… got to love how ironic all this is.
     
    Any suggestions?
    Thanks!Scott

    • Steve Rhode

      June 16, 2011 at 8:45 pm

      Scott,

      To pile on the irony the student loans were undertaken in an effort to wind up doing better in life.

      The good news is that once you can regain some of your lost income, and you get back on track making student loan payments, after 12 consecutive payment the negative marks should be removed from your credit report.

      Keep me posted how it goes.

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