My sister co-signed a student loan. The debtor won't pay anything, and she has now been paying $200/mo for five years. Does she have any recourse?
January 5, 2013 7:42 AM Subscribe
Ten years ago, my younger sister, at age 18.5, co-signed her then-boyfriend's student loan. He defaulted almost immediately. The creditors were after her for years, threatened wage garnishment, she negotiated with them and finally started paying them five years ago. She has now paid it down to 30k. The $200/month payment for her ex's student loans is a pretty significant fraction of her income. Is there anything that she can do legally or is she just stuck with the debt? She recognizes what she did was dumb, and that she is legally responsible for what she did.
posted by anonymous to law & government (31 answers total) 9 users marked this as a favorite
If it matters, the original debt was incurred in IL, the debt was then sold to the Department of Education in FL (not clear on how that happened), and she now lives in CA. Ex lives in IL. She realizes that she was dumb and that she signed a legally binding document. Ex-boyfriend said "I'm not going to pay" and doesn't take her calls, but she believes he is intermittently unemployed and living with his physician parents.
Does she have any options? My parents had suggested maybe she could sue him, or retain a lawyer to threaten a lawsuit unless he negotiates. Or, is there a possibility she is eligible to be released as a co-signer because she has paid a certain number of on-time payments (more than 60 over the last five years)? We saw that another college loan insurer (Sallie Mae) does this, but couldn't find any info on the Florida Department of Education website. Any ideas or suggestions would be welcome.
Options she isn't willing to consider: not paying the debt. She already tried that, the creditors hounded her for five years and had contacted her employer to start garnishing her wages when she finally caved in and negotiated with them. Also, she has already repeatedly asked him to please pay his part, or at least come up with a payment plan - he is wholly unwilling to engage in it at all. He IS making money (according to several mutual friends) and his parents are very comfortably off (summer house, etc). She is making ok money, but things are tight - this expense has meant she has gone without health insurance for several years.
She doesn't have much money, but she will see a lawyer if it sounds like a lawyer might be able to do something. If the lawyer's answer would simply be "sorry, you were an idiot and now are liable for the remaining $30k" she would rather save herself the embarrassment and cost (she still finds this incident embarrassing). Thanks for your advice, mefites!