Posted on 01/13/2024 3:34:12 AM PST by where's_the_Outrage?
‘They removed the interest-only repayments after several calls were made regarding the balance not being reduced’
Dear Quentin, My dad cosigned for my private Sallie Mae student loan in September 2018.
I thought it was a federal loan because I believe they did both types of loans. I started paying back the $153,000 interest-only loan in September 2022, while my dad paid towards the principal and the balance increased. They removed the interest-only repayments after several calls were made regarding the balance not being reduced.
My dad is trying to buy a new house, and Sallie Mae will not take him off the loan even though they said he only had to remain as the cosigner for the first 12 months after I had to start making payments. Sallie Mae never gave us any documentation stating this. This student loan is preventing him from acquiring a mortgage loan. What are our and his options?
Former Student and Worried Son.......
Cosigning a student loan comes with risks. Anyone can end up in the red after failing to repay a student loan — and there’s no reason to believe it’s not somebody’s child or parent. In fact, one-third of the defaulted student loans are held by borrowers who are aged at least 50, even though older borrowers make up around 20% of federal student loan borrowers, according to recent data. Only 10% of cosigner release applications are approved, the CFPB found in another study, so your father is not alone in his quest to have himself removed.
(Excerpt) Read more at marketwatch.com ...
- Cosigning on a $150K loan, don't do it.
- There is a 2nd student loan, how much?
- Made interest only payments, principal increased.
- Was this a basketweaving (useless) degree?
I might cosign on a loan for my daughter, maybe $10K to help her establish credit, but beyond that she's on her own.
Lesson learn
Don’t take out student loads.
Don’t cosign for others.
If you do have loans pay them off ASAP. Even if it means taking on two jobs.
Thanks for the post. This concerned student sure wasn’t so concerned when the debt contract was made. That’s the crux of the issue. You sign; you owe. You co-sign; you owe. Contracts. They are hard for today’s true believers in easy money.
Hopefully the student will be mad as he makes EVERY payment on that $150K college debt. Mad enough to hate the lies he was indoctrinated.
Here is the crux of the matter. The son thought his dad gets removed automatically, whereas what they meant was, after you (not your dad) have made 12 on-time payments toward both interest and balance, you can APPLY to have him removed. Not quite the same thing.
Answer: Pay off your student loan.
Financially correct answer (not the morally right one) is simply declare bankruptcy - your dad is off the hook and us taxpayers take care of it.
So that ruins both their credit ratings, how does that allow his dad get a mortgage?
Nah, that would require an educated person. This kid was too busy going to college to learn anything.
If done correctly, borrower bankruptcy can leave co-signer unaffected. Yes, co-signers are not a real backstop to lenders - especially if it is gov’t
Archive this story.
I thought you can’t bankruptcy away student loan debt?
“ Answer: Pay off your student loan.”
Yes 100%. My child took a part time weekend job , in addition to her full time job, after graduation and paid off her student loans in three year. She lived frugally — no new car, no fancy clothes, no daily trip to Starbucks, no vacations, no credit card balances. Today she lives debt free with 4X her annual income in savings . If she can’t pay cash, she doesn’t buy.
Debt can be overcome with personal sacrifice. Nothing in the article suggests the son has the backbone, or sense of personal responsibility, to do what it takes. My daughter is single because she has learned too many males of her generation are not men.
I thought student loans could not be removed with bankruptcy.
Son refinances the debt in his name. Easy solution.
That said. I took out loans for my kids college. I signed the documents and I paid them. I told my kid that she had to achieve B’s or better for me to continue funding her college. When she graduates, I’ll pay them all off.
This “student” and his father are on the cusp of taking the bait and backing student loan forgiveness. All by design. Free money, less responsibility.
EC
The student "thought" it was a federal loan, while it was a private loan. Makes me think the student also thought there was a 3+ year repay holiday during Biden's term.
Poor Dad. Only 10% of cosigner release applications are approved by Sallie Mae.
Imagine both of them marveled at how "easy" it was when they signed all of the loan application documents.
I checked the article and it doesn’t mention what the student was studying as his major.
If it was something “woke”, both he and his father are gullible to the point of stupid, for spending that much money on something that wouldn’t be a profitable investment.
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