<p>Not for our kid, but by a friend - who has numerous financial problems - for their kid. Clearly they are desperate, but there is absolutely no way we can do that. I feel ill.</p>
<p>We had the same happen to us. It was very hard. We really like and feel for the family but when my H looked into the legal details and read all the small print we found we could be held responsible decades from now, including for interest, penalties and fees, when we might be in retirement. We ended up offering a smaller loan of our own money instead – at least then we could control our exposure. But the family ended up being able to take some steps that allowed them to get the original loan without a cosigner. </p>
<p>It is very uncomfortable and you are right to be very careful.</p>
<p>What a difficult position to be put in. For what it’s worth I think you made the right choice though. Not only are you ultimately responsible for the loan if it is not paid, but any late payments on it could affect your credit rating before you are even aware of it.</p>
<p>My 20 year old college daughter recently did a consumers finance course through her college business department (science major with no interest in business) and was shocked at how risky it is to be a cosigner - said she would never do it or ask anyone to do it for her.</p>
<p>Several years ago, my SIL approached me to cosign on a student loan for her child. It was for a private high school, not a college. In addition, she lives in a very good public school district. It made it a little easier, but no less awkward, to turn her down.</p>
<p>After I turned her down, she approached my retired MIL (her mother). She agreed to cosign, thinking that no matter what happened they couldn’t touch her retirement income. Guess what? They can, and they are proceeding with garnishment on her. I had no idea she had cosigned until she called us asking what she needed to do. I think MIL knew we would tell her not to cosign originally and intentionally did not tell us what she was doing.</p>
<p>Never cosign unless you have every intention of paying it back and plan for it.</p>
<p>Some time back there was a very informative thread on loaning $$$ to family members. I couldn’t find it … perhaps someone else can. </p>
<p>DW and I have been able to sleep better nights after taking the view that any “loans” to relatives should be viewed as gifts. If we got the money back, great. (So far we’re still waiting, but it’s only been twelve years so …)</p>
<p>swimcatsmom,S2 (not a business major either) has registered for a Personal Finance course as an elective in his college’s school of business this fall. DH thought it a great idea. Glad to hear your D really got something out of her class.</p>
<p>
She really did get a lot out of it. Much of it was stuff we had previously told her but she didn’t ‘hear’ when we would tell her. It was quite funny to be on the receiving end of multiple ‘did you know?’ calls about things we had tried to impart to her in the past.</p>
<p>She actually did not want to do the class but had to pick up a 1 hour credit class to keep her full time status when she dropped another class. The finance class was the only one available and she was not happy at all. Ended up really enjoying it (entertaining teacher) and learning a lot.</p>
<p>I’ll add an endorsement for the Personal Finance class. DS took one as an undergrad. He said he learned more in that course than in any other about “real life” management of money. He feels that a Personal Finance class should be a REQUIRED course for all undergrads. I agree.</p>
<p>Am I the only one who is somewhat shocked that a friend is asking this? I can (almost) understand a close relative (a brother or sister perhaps) but not a friend or even a distant relative. To me that’s like me walking across the street and asking my neighbor (who we’ve known for 12 years now) to cosign a loan. Yikes.</p>
<p>I am completely shocked. I would never dream of asking anyone to cosign a loan for my kid. Even my family. I wouldn’t feel bad about saying no if someone did ask me though.</p>
<p>Yes I am shocked. It is not something I would ask of someone and I would feel very uncomfortable if anyone other than immediate family were to ask me. And I would say no.</p>
<p>I’m shocked, too. NJres, please do not feel bad. I would not hesitate to say “no” in such situation.</p>
<p>Never co-sign on a loan unless you’re willing to pay it all back. My wife works for our state’s student loan office and she has seen cases where the grandmother co-signed because the parents had bad credit and then the grandmother was pursued for paying back the loan. There are even cases where the student died in a accident and the loan payments now fall on the grandparents.</p>
<p>Actually they discussed co-signing loans (and said never do it) in my D’s HS economics class. Not the Honors Micro or Macro, but the one open to everyon.</p>
<p>We were not shocked to be asked, although we were surprised. We knew this family was stretched because of medical expenses and was caught short when they did not get approved for a loan without a cosigner. It was for their wonderful child’s college tuition. They knew we are huge fans of the child. We were, if anything, touched to be considered such good friends that they could come to us. But I am very glad my H, although wanting very much to help, advised against our taking on a potentially long-term obligation. The best intentions can go off track. That is why we offered a smaller personal loan instead. So far as I know none of this caused any bad feelings, and it turned out OK all around, but we really felt for the family. It must be SO hard to ask this of anyone.</p>
<p>Simply say no.</p>