Naive College Student Needs Help With Debt--"Cosigning"?


#1

So I’m not in debt, but my good friend is. Her credit is bad due to family circumstances, and mine is fine. She’s asking me to cosign on her loan so that she can at last pay her college debt with it and at last be allowed to graduate after essentially being held hostage for an extra semester. But I don’t know what to do. While I’m being told it won’t “hurt” my credit, the debt is significant --about 30 grand–and I know that I’ll get punished if she doesn’t pay it on time. While I certainly find her herself trustworthy and reliable as a person, the fact of the matter is that her life is turbulent, fortune has never been kind to her, and her family seems hellbent on ruining her finances and her life. I just don’t know if she’ll pay on time, due to any circumstances at all! She doesn’t even have a paying job at this point of her life (she’s not allowed by her family), and while I have a job, I earn minimum wage and don’t work too many hours. While we’re both in the STEM fields, our lives are just as uncertain as any college student’s. Neither of us are going straight into the industry post-bachelor’s due to personal reasons. I really, really, really fucking HATE that despite her dire financial situation, despite her family being near-impoverished, she somehow still cannot get any of this debt off her shoulders from the university. I fucking HATE that they’re holding her hostage! I hate that American colleges PUNISH people of lower financial classes trying to get an education, especially immigrants and people of color. Isn’t this the fucking land of the free or some shit? Isn’t this the land of opportunity?
But I’m scared. I don’t want to make a mistake, and I don’t want to ruin my own life. She isn’t forcing me, of course, she simply asked. But I’m scared. Is it selfish of me? And what the hell do I do?


#2

Hi @ameerkat ! Welcome to the Debt Collective. I’m so sorry that your friend is in this terrible situation, and I’m so sorry that it has put you in this position. Neither of you should be forced to face the choices you are being made to choose.

The creditor class forces us to turn our deep human relationships, like friendship, into something else, something that protects their interests but not ours. As a general rule of thumb I would tell people to never co-sign anyone else’s loans. Too many things can go wrong for both of you.

I’d like to know more about your friends situation, and if you would like to put her in direct contact with me please feel free to share my email with her thomas@debtcollective.org

Is this is private student loan or a federal student loan? What school is this for? Will they deny her the loan without a cosigner? What is the fine print? Many lenders bury all kinds of nasty things in the fine print when you cosign a loan. For example, if the cosigner dies, the full amount of the loan suddenly becomes due and if the borrower can’t produce $30k within 30 days they fall into default.


#3

wow. that’s a tough one for sure…I can’t even begin to advise. I want to say, go ahead…she’s ur friend and she’s in need…and after all that’s what friends are for, right? but on the other hand, the dire circumstances that she is in personally, is about 3 red flags waving right in front of your face, saying don’t do it…but at the end of the day, the decision is yours…I’m sure you’ve probably made your decision by the time I’m replying to you…but good luck anyway…


#4

If you’ve already decided, I hope you said no. Like the first person said, don’t co-sign for loans. It may not 'hurt" your credit, but if she can’t pay YOU are legally responsible. The bank or lender doesn’t care about friendships, they lent money & want it back. Life is unpredictable, you need to worry about your financial stability, not hers. If you suddenly become rich, you can pay hers off if you want.