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The Problems with Cosigning Your Child's Student Loans

Posted on Sep 18, 2019 with No comments

Sep 18, 2019

Moms and dads are, in some cases, asked to guarantee private student loans for their kids. (No cosigner is needed for Federal student loans though.) Guaranteeing can assist a child to get a private student loan or get lower rates of interest on the loan. Guaranteeing likewise brings a lot of risks that may not be understood entirely by the parent. Guaranteeing a loan can be hazardous to the cosigner's fiscal health.

Co-signing a loan can strain relationships.

No one likes to think of it; however, you have a nearly 40% chance that you'll be the one who needs to pay when you co-sign a loan. That's according to a study that discovered 30% of the 3,000 parental co-signers had to take over the payments because the student could no longer do it.

Even worse, that unexpected turn of events resulted in a degradation of relationships between co-borrowers, usually about half of the time-- 49% to be precise.

When providing money to friends and family separate from the co-signing problem remember these 2 tips.

One, treat it as a one-time-only thing. And two, deal with any loan you offer as a gift, instead of as a loan. That way if you do, in fact, earn money back, it's a bonus

Responsibilities of a Co-signer

Lots of moms and dads wrongly believe that a cosigner is a guarantor or contingent debtor, merely allowing the kid to get a student loan. The responsibilities connected with cosigning are much higher. Both, equally obligated to pay back the debt. Both the student and the moms and dad are each individually responsible for paying back the debt.

This has a considerable effect on the cosigner's credit. The cosigned loan is dealt with on credit reports as though it were borrowed by the cosigner since the cosigner really did borrow the cash. It doesn't matter if it is "truly" the student's loan since the cosigner is also a debtor. This may make it harder for the cosigner to receive new credit, such as a refinance of a mortgage since the student loans will be counted against the cosigner's debt to earnings ratios. If the party that has chosen to make the payments stops making the payments or is in default of the debt eventually the delinquency will show up on the credit report and the credit report of the cosigner.

Only one late payment will damage an otherwise excellent credit score for both the student borrower and cosigner.

As soon as the student is late with a payment, the loan provider will instantly start looking for a payment from the cosigner

There may be as much as a one in 3 possibilities that the parent may at some time be required to make payments on the cosigned loan.

Moms and Dads should never guarantee a personal student loan unless they are able and happy to pay the loan back.

Family members or friends on a low or fixed income, need to never cosign a personal student loan and should avoid it at all costs.

Moms and dads ought to also read the promissory note thoroughly, as guaranteeing a loan also may obligate you for late fees or adjudication.

Before cosigning a personal student loan, parents should ask themselves how much they trust their child to act responsibly. Has the child undergone monetary literacy training? Will the kid make all payments on time? Will the kid deal with the loan in an adult way? Does the child respect debt and obligations? Is the kid cautious or careless, orderly or chaotic, reliable or carefree? Cosigning a student loan provides the student control over the cosigner's credit and monetary future.

Consider This

If you are Co-signing a loan, you will affect your own debt-to-income ratio. This can really injure you if you're applying for a home mortgage. You shouldn't go out and get a loan for a car in the months before you prepare to purchase a home. Still, your credit score is at risk if you've co-signed an auto loan for somebody else.

It may be possible to eliminate yourself as a co-signer. With private student loans, you may be qualified for a co-signer release once the person you signed for makes a particular variety of consecutive on-time payments and has a credit check. You'll likely have to remain on the student loan servicer to make this occur. With a car, you can get off as a co-signer if the person you signed for refinances the loan in their own name.

You might have the ability to negotiate terms of co-signing in advance. The Federal Trade Commission suggests that you attempt to have the following language in the contract: 'The co-signer will be responsible only for the primary balance on this loan at the time of default. Both parties on the debt are equally responsible in paying the debt back. That means you will not be liable for late charges or court costs if you're taken legal action against the debt because the debtor is not paying as agreed.

Your unexpected passing might throw the borrower into instant default. Private student loans frequently consist of a clause that lets the lender call the loan due entirely if you as a co-signer pass away or declare insolvency. The CFPB is recommending individuals in private student loans attempt to get a release for their co-signer before something like this occurs.


5 Books to Help College Students Make the Most of Their College Experience

Posted on Sep 1, 2019 with No comments

Sep 1, 2019

This is the time of year when parents are getting ready to send their college kids to their new homes. Along with clothes, shoes and all the comforts of home, there’s one more thing you should be packing: A good book on college life.

College is the time when kids generally get their first taste of freedom: They may be buying their own food, paying for their own needs, and getting acquainted with other college students. But do they really know what to expect in their new life?

Figuring out how to get used to college life is essential for students who don’t want to wind up being alone or maybe getting very homesick. Getting a new college students on solid footing means that they’ll get four years of somewhat real life before they launch into the “real world” of adulthood.

We asked experts in social interaction and college life — including some who specialize in the Psychology — for their top recommendations of books that will appeal to college students and offer solid principles and strategies for becoming successful in their college life and academics. Here are a few of the best college life books to give to your college students.

The Best College Student Survival Guide Ever Written: The one book all students should own before starting or finishing their college experience by MJ Wilson

In this guide MJ Wilson explains to students and parents how to:

1) choose the right major and college/university
2) deal with bad professors and impossible exams
3) keep from changing your major (again and again!)
4) learn study skills/time management techniques
5) reduce test stress and improve your G.P.A.
6) handle being homesick, depressed and lonely
7) improve your resume and make a grand exit! 
8) graduate in the least amount of time possible

MJ Wilson holds a Master's degree in Education. He is a campus speaker on "the do's and don'ts of college" - especially for freshmen. Wilson, who is an Ohio native, now resides in Tampa, Florida. For more information about his books or speaking, visit

How to Win at College: Surprising Secrets for Success from the Country's Top Students by Cal Newport

How can you graduate with honors, choose exciting activities, build a head-turning resume, gain access to the best post-college opportunities, and still have a life? Based on interviews with star students at universities nationwide, from Harvard to the University of Arizona, How to Win at College presents seventy-five simple rules that will rocket you to the top of your class. These often surprising strategies include:

• Don’t do all your reading
• Drop classes every term
• Become a club president
• Care about your grades, Ignore your GPA
• Never pull an all-nighter
• Take three days to write a paper
• Always be working on a “grand project”
• Do one thing better than anyone else you know

Proving you can be successful and still have time for fun, How to Win at College is the must-have guide for making the most of these four important years—and getting and edge on life after graduation.

“This deliberately provocative book is a good way for a smart student to see how out-of-the-box thinking can lead to success in college.”—Seattle Times

Whether it's their first year or fourth, college students (who think they already know everything) can always use powerful and proven tips on how to make the most of their experience. In 1001 Things Every College Student Needs to Know, Harry H. Harrison Jr.'s latest dose of trademark wit and wisdom provides practical advice ranging from class enrollment, living on campus, study habits and more, that every student-and parent-will benefit buying their books before exams start!

The organization and presentation of the material is designed for a short attention span and that's a good thing. Some really obvious points listed in the book, but honestly, college freshman sometimes need to hear the obvious.

Most college students believe that straight A’s can be achieved only through cramming and painful all-nighters at the library. But Cal Newport knows that real straight-A students don’t study harder—they study smarter. 

A breakthrough approach to acing academic assignments, from quizzes and exams to essays and papers, How to Become a Straight-A Student reveals for the first time the proven study secrets of real straight-A students across the country and weaves them into a simple, practical system that anyone can master.

You will learn how to:

• Streamline and maximize your study time
• Conquer procrastination
• Absorb the material quickly and effectively
• Know which reading assignments are critical—and which are not
• Target the paper topics that wow, professors
• Provide A+ answers on exams
• Write stellar prose without the agony

A strategic blueprint for success that promises more free time, more fun, and top-tier results, How to Become a Straight-A Student is the only study guide written by students for students—with the insider knowledge and real-world methods to help you master the college system and rise to the top of the class

First Year Student to First Year Success: 21 Things You NEED to Know When Starting College 

by Tom Krieglstein 

This book is for incoming and first year college students who are ready to make the most of their college experience, beyond what you might hear at at orientation.This book is a combination of the super secret insider tips to college that either us authors learned themselves, or they kept hearing from their campus leadership programs. 

From classroom seating tips, to self-care techniques, to scoring the perfect campus job, this book is your insider’s guide to college success that most likely won’t be told to you at orientation.You’ll notice that the size, layout, and interactive sections of the book are all designed to make this book be your ultimate college field-guide that you can squeeze into a backpack or coat pocket. 

Read straight through, or thumb to a topic that’s most relevant to you. College can be one of the most exciting times in your life and with our field guide in hand, you’re already well on your way to going from first-year student to first year success!


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