Once I Remove My Cosigners, Should I Default on My Private Student Loans?


Dear Steve,

I made the mistake of taking out private student loans to finance my college education and am neatly 100k in the hole. Three years removed from graduation, I’m at a job making 37k/year (before taxes), still live at my parents’ house with no realistic target date of ever moving out, and I allocate over HALF of my income toward my student loan payments each month.

To my credit, I haven’t been late on one payment and meet the qualifications to remove my parents as co-signers. I’ll probably never even get married or have children at this rate because this huge amount in debt is permanently hanging over my head.

There’s no way I’ll ever be able to pay off this debt in this lifetime. It owns me. Is there any point to continue paying the loans once my parents are no longer co-signers? What good is the 700+ credit score I have if I can’t even afford to move out of my parents house? I feel like I would be better off pocketing the extra 12k a year and I’ll just let my credit score tank. At least I’ll be happy and not enslaved to my debt. Additionally, I would just ignore any and every attempt when the lenders try and contact me. Please advise.



Dear Mike,

Well the first step, as you noted, is to get your parents off the loan and confirm they are off the loan before you fall behind on the loans. Being eligible for having them removed and actually having them removed are two largely different realities.

Strategically defaulting on the loans is a valid approach as long as you are educated about the pros and cons and accept the inherent risks associated with that strategy.

The underlying problem becomes the lack of any actual payment modifications that allow people to move forward with their lives. And before people start bitching with the argument you took out the loans so you must deal with it, we need to consider more issues.

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There is no one person to blame for the mess created with private student loans. In this article I examined all the responsible parties in the chain of debt. Logically, the sole responsibility for the debt can’t all rest on the least aware person in this loan origination process, the student.

You should read, Top 10 Reasons You Should Stop Paying Your Unaffordable Private Student Loan to better understand the risks.

As part of your consideration process you need to contemplatively think about the future loss of not being able to afford to start saving for retirement now. The burden of your debt is not only keeping you living with mom and dad but costing you hundreds of thousands of dollars in lost retirement savings you could be investing and letting grow.

You are not simply a victim here and you do have the power to make some informed decisions about how you will approach dealing with your student loan debt. It’s always a good idea to start with your private student loan lender and see what they have to offer. But absolutely avoid any solution that reduces your payments but grows your balance unless that is part of a well informed and strategic plan.

I can’t make the ultimate decision for you about what to do, but I can help widen your eyes to the larger issues and help you to be able to make the best educated decision you can for yourself.


You are not alone. I'm here to help. There is no need to suffer in silence. We can get through this. Tomorrow can be better than today. Don't give up.

Damon Day - Pro Debt Coach

Steve Rhode

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