What are a co-signer’s rights regarding a student loan?

UPDATED: Oct 5, 2011

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What are a co-signer’s rights regarding a student loan?

I co-signed for a private student loan (through Sallie Mae) for my daughter-in-law. My son is now going through a divorce. I would like to be removed as co-signer but I know that is not an option. Do I have other options such as wage garnishment? She is also receiving a grant from the hospital where she works to help pay off her student loan and I can prove that she has not used that money several times to pay her loan. Also, how likely is it that she could get another loan with a different co-signer to pay off Sallie Mae?

Asked on October 5, 2011 under Bankruptcy Law, Texas


FreeAdvice Contributing Attorney / FreeAdvice Contributing Attorney

Answered 11 years ago | Contributor

The problem that you face is essentially the same problem that many co-signers of a loan face. Meaning, once one co-signs on a loan, he or she is obligated as an additional obligor of it until the loan is either paid in full or refinanced. Whether your daughter-in-law is able to refinance the loan that you co-signed for remains to be seen if she has yet to make any attempts to do so.

With respect to the person that you co-signed the loan for, the law holds that there is an implied agreement that the person receiving the benefit of the loan that one co-signed for is obligated to repay any monies the co-obligor ends up paying for the benefit that the laon was for. In your case your daughter-in-law is obligated to you for any cash outlays you might end up having to make concerning her loan that you co-signed for.

Good luck.

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