Student Loans: What To Do If You’ve Co-Signed For A Student Loan That’s In Default
As a cosigner for a student loan, you and the student are of equal responsibility for the loan.
Although the student is the primary borrower, you both can be held accountable for the terms and conditions of the student loan, the Consumer Financial Protection Bureau says.
Also, any missed or late payments can be placed on your and the student’s credit history.
Often, private lenders will hire collection agencies to collect for them. The lender may also name you in a lawsuit as well. Before getting involved with collection agencies or the courts, there are a few things that you can do as the cosigner of the loan to protect yourself and your credit rating.
- At the first sign that the borrower (student) is having difficulty paying the loan, contact the lender and see if there are repayment options available to avoid defaulting on the loan.
- You can always pay the amount due on the loan as if you were the student borrower.
Most private loans are considered in default after 90 days have passed with no payment. You may also default if you file for bankruptcy, default on another loan, or pass away.
If your loan goes into collection, remember that you have rights when dealing with collections. It is unlawful for a collector to harass you or make false statements to you.
When it comes down to co-signing for a student loan, be cautious and think of it as your loan and your responsibility, because it is.
More Content Like This