October 20, 2019

Worst Case Scenarios for Private Student Loan Co-signers

worried student loan borrowerA 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…]

  1. 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.