My daughter has private student loans with Sallie Mae which have been consolidated to one BIG LOAN. My daughter started her first year of college at SVA in Manhattan. At the end of her first year at school my husband was diagnosed with an incurable cancer. We didn’t want to pull her out of school. She was so happy there and we kind of wanted to shield her from all that was going on at home, so we had her continue at SVA. My daughter graduated with high honors but sorry to say that her father passed away a few months before her graduation.
Sallie Mae never wanted to help us or work with us. Whenever we called Sallie Mae most of the time I couldn’t even understand them. Most are not from the country when you call. Of course what happened was, we went through each forebearance that we applied for and added thousands of dollars onto an already high amount of debt. They never wanted to work with us at all. We paid for several years and now my daughter has just a part time job and cannot pay at all. Of course, now we do not have any forebarances left to apply for. They constantly call us and we do not call back. At this point now, neither one of us is in a position to pay even a small amount on a monthly basis.
My question is: how do you handle this in the proper way ??? These are all private loans with Sallie Mae. My daughter graduated in 2007. She paid those loans for four years and then started having problems. Can Sallie Mae garnish my wages, yes, I was a co-signer — I work for a local school district and they would have no problem finding my money sources.
I read your articles everyday just to learn how to handle these situations and you do learn a lot from all the posts.
I’m so sorry to read about the passing of your husband.
Thank you for being a loyal reader. I’m glad I’m here to help as best I can.
In 2005 Congress changed the bankruptcy laws to make private student loan debt not dischargeable. And on top of that the private student loan lenders are not required to make any allowances or consideration for people that can’t pay.
Sadly the answer is yes, as a cosigner you are 100% responsible for the debt if your daughter can’t pay. The creditor could go as far as suing you, getting a judgment and depending on what state you live in they could then garnish your wages.
Until Congress changes the law to allow people a fair shot at finding a realistic solution for problem private student loan debt the best I can offer you is The Ultimate Guide to Dealing With Student Loans You Can’t Afford.
Unless you specifically know the loans are exclusively private loans, I would follow the advice in the guide for federal student loans since Sallie Mae did originate some government guaranteed loans.
If you follow the guide and are still stuck and Sallie Mae is threatening you with a wage garnishment you could always file a chapter 13 bankruptcy to delay any action against you for the years the bankruptcy is in place. It’s not a perfect solution but it would prevent your wages from being garnished if you live in a state that allows garnishment for this.
Please post your responses and follow-up messages to me on this in the comments section below.