STUDENT LOANS 101 (also known as “No good deed goes unpunished”)
Student loans seem like a great idea, until the bill comes due. Do you know what’s even more distressing for a lot of families? When the Government comes after the parents for their son or daughter’s student loan that they co-signed.
Even with all the recent talk about student loan forgiveness, it’s unlikely that the U.S. will allow student loans to be forgiven. There’s just too much money at stake. . . as in $1.78 trillion!
You might ask: well didn’t the Government allow us to defer payment on student loans? The answer: yes, but the interest on those loans continued to accrue. That means that the loan balance keeps increasing. . . and increasing. . . and increasing!
In addition, what many parents don’t realize is that the student loan they co-signed for years ago is non-dischargeable. That means that even a bankruptcy will not allow you to get out of paying a student loan. You were just there to guaranty that the loan would be paid if your son or daughter could not make the payments.
So here’s the moral to this story: Don’t do it! If your son or daughter need a loan, let them sign. But don’t mortgage your future if you don’t have to.
Ralph Guenther