| Parents are always willing to help their kids in any way | | | | payments on the loan only in case of a default by a |
| they can. It is simply a pre-programmed parental | | | | primary borrower. |
| instinct. While it is expected to disappear once kids get | | | | Beware of Cosigning Risks |
| ready to leave home, long-established habits die hard, | | | | Putting your signature on any document incurs some |
| forcing parents to oversee the well-being of their kids | | | | kind of liability. This is especially true with financial |
| well into adult years. That is why so many parents | | | | documents. Therefore, before you put your signature |
| take on the responsibility of assisting their kids to get | | | | on a legal document, such as a loan agreement, make |
| into college, and, sometimes, even to pay for it. | | | | sure you fully understand what you are getting |
| Once kids are out of high school, it is time for a new | | | | yourself into. |
| exciting venture - getting into college. Besides many | | | | There are many questions asked by parents willing to |
| organizational and financial issues, preparation for | | | | cosign a student loan regarding their liability. A simple |
| college is full of new social and educational hopes and | | | | matter of fact is that parents assume full responsibility |
| expectations. While it may be somewhat exhausting at | | | | to repay the loan if, for some reason, their child fails to |
| times, it is a lot of fun to send your kid to college. | | | | do so. The worst case scenarios of loan consignment |
| The best way to help your kids achieve a dream of | | | | are as follows: |
| higher education is to help them financially. With tuition | | | | 1. Your child becomes an irresponsible borrower and |
| costs being raised every year, college education is no | | | | decides to give up on loan repayment. |
| bargain these days. This is especially true with | | | | 2. Due to financial hardship your kid falls behind on |
| prestigious private schools. Even public schools, | | | | payments. |
| featuring lower in-state resident tuition fees, are quite | | | | 3. Your child becomes seriously ill and/or dies, leaving |
| expensive when you add up all additional fees, book | | | | you with the responsibility of loan repayment. |
| expenses, dormitory charges, and so forth. | | | | In all these cases repaying a loan becomes your |
| There Are Plenty Ways To Assist Your Kids With | | | | responsibility, and a true headache. Should you fail to |
| College Expenses | | | | do so, your credit score would be severely damaged, |
| Many parents who think ahead and have sufficient | | | | and further collection activities may be imposed by |
| financial resources, have usually secured college | | | | lenders against you. Federal loans, however, waive a |
| financing for their kids by either saving money aside or | | | | responsibility for cosigners to repay the loan in case of |
| participating in college savings plans, such as a 529 | | | | a death or terminal illness of a primary borrower. |
| plan. Many just present a lump sum of money to their | | | | There Are Always Alternative Ways |
| kids upon high school graduation to cover a part or, | | | | If you seriously doubt the ability of your kid to repay a |
| sometimes, all of college tuition and fees. Unfortunately, | | | | student loan, there are other options to be considered. |
| there are a number of families who were not able to | | | | Your child may try to get a student loan by him or |
| accumulate enough savings due to many reasons to | | | | herself. While it may be difficult in case of privately |
| help their children with college costs. Very often, the | | | | funded student loans to obtain a loan without a parent |
| only feasible way to assist children with college | | | | cosigning it, most government funded loans are easily |
| education is to cosign on their student loans. | | | | obtained without help of parents. Attending a less |
| Co-Signing a Loan Is Very Similar To Taking One | | | | expensive school may be another option. Part-time job |
| Yourself | | | | while attending college may be a partial solution to |
| Cosigning a loan is almost like taking a loan yourself. A | | | | college financing also. |
| cosigner has to provide personal information to a | | | | Once again, even if you decide to cosign a student |
| lender, as well as to disclose his or her income and | | | | loan, make sure you fully understand all implications and |
| assets. Both, a signer and a cosigner are considered | | | | possible consequences and have a repayment |
| to be borrowers from the legal perspective, the only | | | | strategy ready in case your child fails to pay off a |
| difference being that cosigner would have to make | | | | loan. |