Promising to repay a student loan can be an expensive proposition. First of all, there doesn’t seem to be any determination as to how much you can afford to repay. The lending companies will simply write the checks so that the student can finish her education. When you guaranteed the loan, it was only a few thousand dollars. But multiply that by four years of college and it can be quite a bit more.
Everything would be fine if the system worked the way it was supposed to. The student graduates and gets a good job, enabling her to repay all of the loans. But, too often life interferes and that great job just doesn’t pay enough to cover everything. Then the lending company will go after Mom and Dad. And by then the loan amount has grown with interest and late charges.
And since the loan is now in default, there goes your credit score. It suddenly plummets a hundred or so points before there’s much you can do about it. Protesting that it was your daughter’s student loans won’t help. You have little choice but to pay anything due. There just isn’t any way to avoid it without filing for bankruptcy and proving undue hardship.
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