Asked to co-sign a college loan

ucbalumnus
Mon, 28 Dec 2020 03:19:08 +0000

If you become entangled in their finances through cosigning, you will find yourself judging them. Three kinds of scenarios are likely:

A. They are in a bad circumstance with regard to college financing (e.g. low income, not in reasonable commute of a state college, in a state with poor in-state financial aid). Perhaps you may consider the student worthy of help, but if you are able and willing to help, better to gift the money to the student or pay the tuition than cosign a loan that is likely to go into default.

B. You consider the student worthy of help, but the parents made poor financial choices that mean that there is no college money when there should have been enough with reasonable parent financial choices. In this case, it is also better to gift the money to the student or pay the tuition than cosign a loan with the financially irresponsible parents.

C. The student made a choice of a much more expensive college than necessary, and the parents did not stop that choice. In this case, most here would not recommend enabling continued poor choices by both the student and parents, even if you have the money and generosity.

Of course, if you cannot afford or do not want to give the money in the first place, then you have no business cosigning a loan for that amount.