Trim your student loan debt Boston Globe, United States - ... could limit his or her annual educational loan debt repayment to 15 percent of discretionary income, said Peter Mazareas, vice chairman of the College...
'Peer' Loans Ease the Credit Crunch Wall Street Journal - Many of the loans were for small businesses, homes and personal expenses, such as credit cards and college tuition. "Over half of entrepreneurs already get ...
Bill on loan program for college students approved BusinessWorld Online, Philippines - A HOUSE panel recently approved a bill seeking to implement a nationwide loan program for college students. In a hearing on Wednesday, the committee on ...
Autoworkers rally in support of bailout San Francisco Chronicle, USA - But his thoughts were on the older two daughters, who are in college. "If the government can give the industry the loans, it will give the companies a ...
Villa Park trustees question library's $24.9 million request Chicago Daily Herald, IL - Villa Park officials say the proposed $24.9 million loan would affect the village's borrowing ability and, possibly, its credit rating. "It's like cosigning...
Should You Co-Sign For A Private Student Loan? SayCampusLife, VA - Jul 28, 2008 Co-signing a private student loan for your son or daughter makes financial sense, but you'll want to make known that the repayment of these loans is on ...STU
Lending 'love money' can leave you broke Toronto Sun, Canada - Aug 3, 2008 Campbell also warns about co-signing for a loan. "This can be dangerous, too, because they could be on the hook if the person defaults. ...
Keep in contact with your lender The Coloradoan, CO - Jul 6, 2008 Any cosigning and/or large purchases on credit will negatively impact your credit score. Many home loan programs today require a minimum credit score for ...
Banker requiring co-signer can serve function Times Record News, TX - Jul 26, 2008 He explained to his granddad that the banker would loan him the money, but only if the grandfather would co-sign the loan paper. ...
Op-Classic, 2004: Saving Fannie Mae New York Times, United States - Jul 12, 2008 But defining these goals turns out to be rather tricky: what percentage of their loan portfolio should come from low-income areas, for example? ...FNM
Consumer Alert: Financial Aid Concerns WILX-TV, MI - Jul 10, 2008 Lauren says, for the most part, getting loans has been easy, especially with the help of her parents as cosigners. But then she hit a roadblock. ...
Source: Google News
Peer Monitoring and Credit Markets - JE Stiglitz - The World Bank Economic Review, 1990 - World Bank ... Making the individual cosign his neighbor's loan imposes on him an addi ... actions of
the person for whom he has cosigned the loan. Cosigning also increases risk. ...
Loan performance and race - RE Martin, RC Hill - Economic Inquiry, 2000 - Blackwell Synergy ... For each of the matched loans, the race and ethnic variables represent the probability ...
zerorone variable for a cosigner cosign , and a borrower occupation code ...
Financial intermingling in small family businesses - T Yilmazer, H Schrank - Journal of Business Venturing, 2006 - Elsevier ... households may be more likely to cosign for loans... family business households cosigned
for loans more often ... businesses in terms of the likelihood of cosigning. ...
[BOOK] A Credit to Their Community: Jewish Loan Societies in the United States, 1880-1945 S Tenenbaum - 1993 - books.google.com Page 1. ACREDIT? THEIR COMMUNITY 880 Jewish Loan Societies in the United
States SHELLY TENENBAUM Page 2. Page 3. Page 4. By supplying ...
LEARNING BY ASSOCIATION: MICRO CREDIT IN CHIAPAS, MEXICO - GA BARBOZA, H BARRETO - Contemporary Economic Policy, 2006 - Blackwell Synergy ... In this sense the literature clearly indicates that peer monitoring is a function
of the relative group and center size as loancosigning within groups ensures ...
The Economic Impact of the Israeli Loan Guarantees - SL Richman - Journal of Palestine Studies, 1992 - JSTOR ... make their living assessing risk, and they apparently think Israel is not a good
risk, or else the United States would not be asked to cosign the loans. ...
[PDF]Measuring Trust in Peruvian Shantytowns - D Karlan, MM Mobius, TS Rosenblat - Institute for Advanced Study and Wesleyan University, 2005 - nber.org ... sponsor to cosign a loan? There are two two basic ways to define social
distance ... to the sponsor?s credit line by cosigning a loan. ...
Source: Google Scholar
Co-signing a daughter's college loan
Dear Debt Adviser,
I am worried about co-signing for my daughter's college loan. It will be in the $10,000 range just for this first year. I am 53 and know this debt will affect my future retirement. I have checked on loans that allow for co-signer release after a time. Any suggestions would be much appreciated. Thanks. -- Kristin
Dear Kristin,
Your question has some implications both past and future. The future concern for a first year debt of $10,000 leads me to expect a second, third and fourth years loan totaling $40,000. Your concern about your retirement indicates that you expect to be paying at least a part of the $40,000 yourself based on past performance from the daughter. I am sure that you have arrived at a loan amount of $10,000 after researching every other possibility, but just in case you did not, and for the benefit of my readers, let's quickly go through the process.
First, take advantage of the financial aid office at your daughter's school. They should be able to walk you through every possible way to squeeze out an extra nickel from federal loans, grants, work-study opportunities, loans in the student's name only and other means before seeking a private loan.
As you probably already know, for federal loans or grants you must fill out a Free Application for Federal Student Aid form and the College Scholarship's Services PROFILE is required by many institutions for private and institutional funds. What you and many readers may not know is that if you do not qualify for need-based funds the first year, you should apply again for the next school year. Your circumstances may change or eligibility requirements may change, you never know and all it takes is the time to fill out the form(s).
Once you have explored all other options, a private or alternative loan may be worth consideration. As you have found out, students will probably not qualify for such a loan without a co-signer unless they meet certain criteria:
1. Two years of good credit history
2. Be a U.S. citizen or permanent resident for two years.
3. At least $18,000 in annual income with full employment for two years.
Many undergraduate students are not going to meet the above criteria.
As you state in your question and as I have warned in other columns, you as the co-signer of a loan have to be prepared to make the payments if the loan defaults. In fact I will go so far as to say that it is one of Bucci's maxims that "a co-signed loan is a defaulted loan. You just don't know it yet!" The corollary to this maxim is, "Any loan you make to a relative is really a gift. You just don't know it yet!!"
However, as you mentioned, many alternative loans have a co-signer release option available after 24 to 48 consecutive on time payments.
What you have to decide, Kristin, is whether you are willing to make that kind of sacrifice/gift for your daughter to attend the school she has chosen.
My advice is to put pen to paper and find out if you will be able to afford college loan payments and the retirement that you have worked for and deserve. This is an animal with a long tail, considering your daughter will likely be in college four to five years at the minimum. If the answer is no, then you and your daughter will need to have a serious discussion about just what is involved with financing her college choice.
A number of non-financial options can be considered such as the first two years at a community college or spending some time in the military to amass some college money from Uncle Sam, or even working while in school part time.
If you do co-sign a loan, make sure you shop around for the best deal and research that co-signer release option well.
