Reply To: Co-signed on a student loan

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Yes, she is fully responsible for the debt. Co-signing means exactly that “if this person does not repay, FOR ANY REASON, I will assume the debt in full”. It does not matter if her daughter dies, or becomes incapable or unwilling to pay the debt, the loan providers can use any legal means to collect that debt, including garnishment, possibly liens against any property the co-signer owns. If she does not pay, her credit will be ruined, and even paying slower than the loan collectors demand will seriously dent her credit rating. She needs to contact both her daughter and the collectors and work something out, possibly with the help of consumer credit counselors or a lawyer.
Why does the loan provider require a co-signer? Because they do not believe the original borrower will be able to pay them back in a timely fashion. Seems that the provider was correct, as they often are. No matter what, NEVER co-sign a loan!!!