Co-Signer Rights?

Question: I am trying to negotiate with Sallie Mae to settle the loan amount: to get some principal forgiveness and in return I will pay them off in full on the settled amount. My purpose in this is simply to reduce the loss I have to take on this.

My question to you is, what are my rights as a co-signer? What can I reasonably expect Sallie Mae to do for me. They are not very responsive, it is hard just to find someone who will return my call. So, I just would value your comments on what I should, and should not, expect from them in the way of help. Your response would be very much appreciated, thank you. Jeff. Irvine CA

Answer: You're now responsible for the debt as co-signer. Go ahead and try to negotiate with Sallie Mae. It can't hurt. But since you signed a legal document you're on the hook for the full amount. Maybe they'll cut you a break. But it is under no obligation to make a deal with you.

I know it's too late, but your experience is why everyone needs to think very carefully about the financial risks before co-signing a loan. There are other ways to help someone out with their student debts (or any other debt for that matter) without taking on the obligation imposed by co-signing.

About the author

Chris Farrell is the economics editor of Marketplace Money.

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