Cosigning on a loan is never a good idea and is something that I’m a big opponent of. Not only do you end up paying a portion of the bill most of the time, you also hurt the relationship with the friend or relative that you sign for.
When we talk about cosigning we usually are talking about a car or credit card for your teenager. However, I was forwarded an article the other day by smartmoney.com sharing that there are over 115,000 people who are having their monthly social security benefits garnished for unpaid student loans. Yes, they can garnish your social security for student loans! Most of the cases involve a parent or grandparent cosigning on a student loan.
With the average social security benefit just over $1,200 a month, garnishments are hurting seniors’ ability to pay their basic expenses. Yes, they thought they were doing a noble thing by helping their child or grandchild go to college. But there’s no guarantee that they would graduate or earn enough money to pay back the loan. In turn, they have now risked having a portion of their social security check being garnished for the rest of their lives.
How do you feel about the fact that social security is being garnished to pay student loans? If your child or grandchild came to you asking to cosign for their education what would you say?