4 Signs You Shouldn't Cosign That Student Loan
"Don't take a year off to save money," Kantrowitz says. "It's better to complete the degree to get to that higher-paying job quicker, especially in today's unstable economy."
Think before you sign
Parents often think that cosigning simply means they are helping their child get a loan, but a cosigner is equally obligated to repay the debt if there is a default.
"Parents need to protect their own credit," says Kantrowitz. "Realize that 'cosign' means 'your loan,' which can use up your own credit resources. Also, I never advise even considering a home refinance, using credit cards or borrowing from retirement savings to pay for college."
Because they are the ones who will sign the checks, parents ultimately have control over how much they'll help their children, says Cruze."Think long term," she says. "When your student graduates and gets their first job, and may be considering a mortgage loan, they will be so thankful not to be burdened with payments for student debt that might have been avoided by working hard and taking the least expensive route through college."
Select the service that is right for you!COMPARE ALL SERVICES
- $2.5+ million portfolio
- Large-cap and dividend focus
- Intraday trade alerts from Cramer
- Weekly roundups
Access the tool that DOMINATES the Russell 2000 and the S&P 500.
- Buy, hold, or sell recommendations for over 4,300 stocks
- Unlimited research reports on your favorite stocks
- A custom stock screener
- Upgrade/downgrade alerts
- Diversified model portfolio of dividend stocks
- Alerts when market news affect the portfolio
- Bi-weekly updates with exact steps to take - BUY, HOLD, SELL
- Real Money + Doug Kass + 15 more Wall Street Pros
- Intraday commentary & news
- Ultra-actionable trading ideas
- 100+ monthly options trading ideas
- Actionable options commentary & news
- Real-time trading community
- Options TV