Bankrupt parent wants to co-sign for daughter

[rbelanger]

My daughter has 2 years left for her bachelor's degree.
My wife and I filed and were approved for bankruptcy in 2009.

I was unemployed and we lost our house because all of my equity was in the house. It was worth $130,000+ less than what we paid for it in 2005.

How can I help her as a cosigner?
She needs about $10,000 - 15,000 each semester.
Private banks treat me like a leper.

Is there any help for me out there ?

thanks
Rich

[HHM]

You can try the Federal Parents Plus Student Loans

http://www.parentplusloan.com/

However, do you really want to saddle yourself and your daughter to the indentured servitude of student loan. You just got a fresh start and now you want to put yourself and your daughter IN DEBT, and a debt that cannot be eliminated.

[rbelanger]

paying for college

thanks for the info.

but how would my daughter finish school without a loan?

Its almost $40,000 a year, she luckily has $20,000+ in scholarships because she's a great student.
She can't earn 20,000 per year and I'm just getting back on my feet.

thanks for any ideas.

[Pandora]

why cant your daughter get a student loan all by herself without a co-signer? It is possible to get - ours did (thankfully) as we are from the old school of you work your way through college and get your own loans. She may end up paying a little bit higher rate without a co-signer, however she wont saddle anyone with her debt if something happens where she cannot make the payment upon graduation or years down the road following. Many student loans dont have to be repaid until you graduate, and if they do, its usually a minimum of around $50 a month, the rest can be forebeared until graduation. Know that may sound harsh for many, however its a good thing we did because had we co-signed for our daughter, her credit would've been shot along with ours after DH suddenly lost his job last year unexpectedly.

Also - as HM stated, you are going to be saddled to that debt for years and years, and what happens if your daughter cannot find a job to repay her loans and everything else? You will be on the hook for those payments since you co-signed and not much you can do at that point if you cannot afford it. Take the time to enjoy your business just beginning to turn around because whats good now may not be in a month or 6 months from now in this economy. I'm sure your daughter will hopefully land a job upon graduation making more than 20K a year in order to repay her student loans.

[mrskal]

I am very new to this, have not even filed BK yet, but I was told by financial aid at my dauhgters school, that if I dont qualify for the parent subsidised loan, which I wont, have poor credit and late mortgage payments, she will qualify for her own unsubsidised student loans.(stafford, I think) You can always help her pay it back though, just wont be responsible for it.

[meateater]

I just paid the last of my student loans off, I'm in my 40's, finished school in my 20's.

As it currently stands, if you take out the loans, you / your daughter are looking at about $40K in loans when she finishes the degree. Have you done the calculations for the monthly payments for this amount of debt, what she'd need to earn to pay for it, and if that income can realistically be anticipated when she graduates? I took out student loans without really understanding what I was getting into. Although I was fairly frugal and worked, in hindsight I could have borrowed less. I ended up in bankruptcy because I could not find a job that paid me enough to cover student loans, living expenses, and credit card debt that built up while I was in school and while I was underemplyed. If I had it to do over, I would have looked at alternative ways to fund my education.

Is she very attached to the school she's at now? Maybe she could transfer, or spent a semester or two at community college or study abroad program to cut down on costs. Is ROTC or military an option?

There are a plethora of blogs out there about student loan "slavery" written by recent (and not so recent) grads who can't find work, can't pay their loans, and have no way out. I'd take a look at those blogs so if loans are taken out, there's a more complete understanding of the consequences of student loan debt, there's worse things than not being able to complete a degree in the planned time frame at the intended instituion.

You just got out of bankruptcy yourself, if you haven't saved up for your own retirement, I'd think hard before co-signing for new debt which, due solely to the horrible job market, might be something you end up responsible for repaying.

I remember being an undergraduate, and would have been devastated if my folks had said I could not go back to school as planned becuase of money. And I would have been devastated if I could not complete graduate school, which I funded myself with loans and employment. But if I had had a better understanding of the consequences of borrowing money for school, I probably would have done things differently (but still got the degrees) and avoided bankruptcy. Even if you ultimately end up cosigning the loans, this could be a financial learning experience for you and your daughter.

Good Luck!

[DebtHater]

Is there any help for me out there ?

With all due respect the best help for you is NOT to co-sign. While it is noble for you to want to do this for your daughter, it is this very thing that ruins family relationships for years to come. After all, what will happen when she can't pay and you can't pay? Then they come after you!

[wipetheslate]

How can you help her?

Tell her to STAY AWAY FROM STUDENT LOANS!!!!!!!

Better to charge her tuition and fees on a CC that is dischargeable.

A friend of mine's wife is an attorney and she always steers people clear from student loans. Your daughter will likely be shackled with them for all her working life.

[Flamingo]

My daughter has 2 years left for her bachelor's degree.
My wife and I filed and were approved for bankruptcy in 2009.

I was unemployed and we lost our house because all of my equity was in the house. It was worth $130,000+ less than what we paid for it in 2005.

How can I help her as a cosigner?
She needs about $10,000 - 15,000 each semester.
Private banks treat me like a leper.

Is there any help for me out there ?

thanks
Rich

You are fresh out of BK and expect to be approved to co-sign on about $20,000 worth of student loans for one year? When you attempt to co-sign and they pull your credit, it won't happen. Unfortunately you and your daughter both need a reality check. Have your daughter go to the financial aid office at her college and sit and talk with a financial aid counselor. Have her explain the situation (believe me, they have heard it all before). They can advise her what she can do as to her optoins to get her degree. There are tons of scholarships and grants out there over and above what she has now but she will have to do the footwork to get them. They will not be handed to her. There are pell grants, Stafford Loans (there is a limit on those each year and they are not large), work programs, etc., etc. She can also go out into the working world for a year or two, save the money, and go back to school. I've put three through college and have been through it all - there is a lot out there as to grants, programs and scholarships but the student has to do the footwork which many do not want to do - collage age kids in this generation want it all handed to them.

Best of luck to you both.

[debtprison]

thanks for the info.

but how would my daughter finish school without a loan?

Its almost $40,000 a year, she luckily has $20,000+ in scholarships because she's a great student.
She can't earn 20,000 per year and I'm just getting back on my feet.

thanks for any ideas.

As others have said do everything in your power to avoid student loans for your daughter. If you do it there is a big chance both you and your daughter will have your lives ruined by it. Student Loan debts are not easily backed out of under under almost any circumstance. Did you know for instance that it's easier to get rid of an IRS debt using the Statute of Limitations or Bankruptcy than it is a Student Loan debt?

I would encourage her to begin working somewhere if at all possible ASAP. It will build character. She may not be able to make $20,000 but she should be able to make $12,000 or so easily. That'll help. That will leave you with having to come up with $8,000 per year.

If you do decide you have to do this (please don't!) you should avoid co-signing and have her get only subsidized loans. Subsidized loans have numerous advantages not only for the regular interest rate but also during repayment.

[bigtim6656]

are you ****ing me. Your telling him to tell his daughter no and to run out get CC with the intent of going bankrupt later.

With CCs your looking a 20%+ in interest, right now I think my student loans are 18k and at 5%. From what you and your wifes friend is saying is to charge the money to credit cards and plan o file and ruin her credit later. Seems smarter to borrow what you need on student loans and pay he money back later. Plus if you going to college for something you have to worry about a few hundred dollars a month in loan payments you need a new major.

As for the OP she should get the new direct fed loans(oldstafford loans) I am getting 3000 and 1750 for each semester this year and I am second year.

How can you help her?

Tell her to STAY AWAY FROM STUDENT LOANS!!!!!!!

Better to charge her tuition and fees on a CC that is dischargeable.

A friend of mine's wife is an attorney and she always steers people clear from student loans. Your daughter will likely be shackled with them for all her working life.

[KeithDoxen]

Don't know if the OP is still reading this but here goes...

So it sounds like your daughter needs 40k to finish school and that the rest of her aid is all in "scholarship" form. That means that she hasn't touched any student loans, right? In that event, she should qualify for federal student loans which do not require either a credit check or a cosigner. Your daughter can take these our all on her own and can probably get close to the needed 40k this way.

Before she does so, she should sit down and calculate three numbers.

1) The average starting salary for someone with her degree.
2) The monthly payment for her student loans totalling 40k (there are websites that help you figure this out).
3) Her likely monthly expenses upon graduation.

Add up the figures in categories 2 and 3. If that number is greater than the figure in category 1 (her salary), then there's no point in taking out the student loans because she probably won't be able to pay them upon graduation.

Federal student loan debt is somewhat more reasonable than private student loans and with a balance of 40k, she may be able to repay them over a long period of time with a minimum payment of only a couple hundred dollars a month. So it might not be THAT bad. But like any investment, the important thing is the return. If her degree is marketable and she is probably going to land a job making 50k right out of school, then go for it. If she's getting a Philosophy degree and will end up working at Starbucks for a couple of years before enrolling in grad school for a Masters in Art History, at which point she will resume that job at Starbucks, then you might want to talk to her about what she can afford on a Starbucks salary.

[bigtim6656]

I AGREE, I have seen alot of folks go to school to end up with the 10 dollar an hour job they could have had 4 years before and 40k in loans later.

My first loan I spent smart, the second not so much, the third when I was planning the fun I looked at just how much I had racked up and it woke me up. Glad I looked before I spent.

Don't know if the OP is still reading this but here goes...

So it sounds like your daughter needs 40k to finish school and that the rest of her aid is all in "scholarship" form. That means that she hasn't touched any student loans, right? In that event, she should qualify for federal student loans which do not require either a credit check or a cosigner. Your daughter can take these our all on her own and can probably get close to the needed 40k this way.

Before she does so, she should sit down and calculate three numbers.

1) The average starting salary for someone with her degree.
2) The monthly payment for her student loans totalling 40k (there are websites that help you figure this out).
3) Her likely monthly expenses upon graduation.

Add up the figures in categories 2 and 3. If that number is greater than the figure in category 1 (her salary), then there's no point in taking out the student loans because she probably won't be able to pay them upon graduation.

Federal student loan debt is somewhat more reasonable than private student loans and with a balance of 40k, she may be able to repay them over a long period of time with a minimum payment of only a couple hundred dollars a month. So it might not be THAT bad. But like any investment, the important thing is the return. If her degree is marketable and she is probably going to land a job making 50k right out of school, then go for it. If she's getting a Philosophy degree and will end up working at Starbucks for a couple of years before enrolling in grad school for a Masters in Art History, at which point she will resume that job at Starbucks, then you might want to talk to her about what she can afford on a Starbucks salary.