A recent U.S. News & World Report story about student loans contained a startling fact – more than 91% of private student loan borrowers took out private student loans with a co-signer. In most cases, that co-signer is a parent.
What are the potential issues that could impact you if you are a co-signer? 1
First, you need to verify that the loan you co-signed for is a private student loan. If you co-signed for a federal or federally guaranteed student loan, you will have additional protections. This article focuses on private student loan co-signers only. [Read more…] about Worst Case Scenarios for Private Student Loan Co-signers
- Note the difference between a co-signer and a guarantor. A co-signer’s obligation is exactly the same as the other co-signer, regardless of who is receiving the statements. A guarantor, on the other hand, only becomes liable if the primary borrower goes into default. See Wikipedia’s definition of co-signer here, and guarantor here. ↩