Why Private Student Loans Are A Dangerous Game

Co-signing a younger relative’s private student loans doesn’t seem like such a reckless idea. After all, it’s an investment in their education and careers, they’ll certainly be able to pay it all back once they’re educated, and they’re going to outlive you, anyway. That’s not always the case, and the risks can be substantial. Jessica’s best friend had her grandfather, now 80 years old, co-sign her private loans with Citibank. After her sudden and shocking death, now he’s on the hook for $70,000.

My best friend Samantha was always passionate about learning and furthering the field of science. As such, she was the first person in her family to earn a Bachelor’s degree, in Chemistry. We were so proud of her, and she had aspirations to do research to help find a cure for HIV. In order to be able to afford her degree and all of the associated costs of it (housing, etc.), Samantha took out a total of $70,000 in private student loans through Citibank. Because she was young with little credit history, they asked for a co-signer, and her grandfather gladly helped her out.

In March, Samantha died suddenly. We were all blindsided and completely devastated. When we sent her death certificate to her other lenders, they quickly forgave the balance. But because her grandfather had co-signed her loans, Citibank refused to budge. On top of losing his granddaughter, Sam’s ailing 80-year old grandfather is responsible for paying back every penny owed, with interest.

I know that because these student loans were private, it’s a legal grey area in terms of if Citi has to forgive them or not. But really, Citibank? Way to kick a man while he is down. Samantha’s family has already been through enough grief, and exhausted their savings paying for their daughter’s burial. Is there anything we can to do get these loans forgiven, or if not, reduced? I understand that Citi doesn’t want to lose their investment, but collecting interest on a dead woman’s loans to make a profit just seems cruel.

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  1. deathbecomesme says:

    I said this last time as well. When you co-sign you know what you are singing and know that if that person can’t pay (FOR ANY REASON) you are on the hook. I feel bad for them but they made the decision that put them in this situation. The bank didn’t hold a gun to his head

    • Talmonis says:

      No, but current society did. Entry level jobs are requiring bachelor’s degrees. So what happens when a newly minted non-rich student wants to go to school? Oh wait, they have to get a co-signer. By default. It’s made to do exactly this. They want our money, and they want it all. They want life-long indebted serfs.

      • Here to ruin your groove says:

        I come from a non-rich family and didn’t have to bother my parents to co-sign for student loans. All $32K in debt belonged to me. It’s not impossible or that difficult.

        • mikedt says:

          $32k is about a year of college nowadays. Average college tuition has doubled in just the last 10 years. A far cry from the $1800 a semester I paid in the 80’s.

          • Here to ruin your groove says:

            I just graduated 3 years ago from UW-Madison, so I think my experience is still relevant. Of course I chose to go to a school in the state I live in because I’m not crazy about throwing away money.

            If you’re willing to throw money away to go to an out of state school you should be prepared to pay for it. (not saying the woman in the article did that, but $70K on a BS in Chemistry forces me to assume)

            • mikedt says:

              Penn State, is currently 15k a year tuition for in-state students. Even without tuition hikes, that’s 60k for just school, no books or living costs. So 70 grand isn’t out of line, living it up, college debt.

              Your school is 10-13k a year (just tuition) depending on what state you’re from. Unless you can manage one hell of a summer job, you’re going to graduate with an easy 50+ grand in debt.

              Bottom line, unless your parents are kicking in – and in this case the uncle co-signed which leads me to believe there are no parents or they aren’t rolling in dough either – college results in a lot of debt. Ivy league or out of state not required.

              College and Medicine, no matter what they charge, they know somebody will pay.

              • Bibliovore says:

                If there’s really not much parental money, need-based grants are usually available: Pell grants can cover up to $5500/year these days, I think, and many schools have their own need-based programs. But even at maximum allotments ( = maximum need), those rarely cover all expenses.

                Also, parental income and assets need to be fairly low to qualify, or you need to be able to prove you’re wholly on your own. Back when I started school, we found out that alimony isn’t subtracted from parental ability-to-pay calculations, either; I suppose they figure it’ll be coming back to the student from the other parent, though that’s obviously not always the case.

                • jimbo831 says:

                  Need based aid doesn’t come because parents aren’t helping you with school. They come only if your parents are extremely poor. Typically, they make too much money to get you need based aid but not enough to help you pay (or they choose not to help you pay, not the fault of the student). Also, there is so much misinformation here about going to school for $2500 per semester. That is great in SOME states. Many states, like PA cost a lot more. Same goes for all the people that graduated 10+ years ago. It is a different world now as far as tuition goes.

          • There's room to move as a fry cook says:

            If you don’t have $$ then stay close to home and go to a state college. In-state tuition is only $2500-$5000 /semester before Pell grants and scholarships.

      • TuxthePenguin says:

        “Entry level jobs are requiring bachelor’s degrees. So what happens when a newly minted non-rich student wants to go to school?”

        Ummm… work while going to college? Take the first two years at a local community college and then transfer to the university for the last two? The idea that a modern society should be built to allow someone to idle for four or five years is insane.

        Also, we need to stop including room and board into the cost of college. You’d be needing both of those things whether you went to college or not. The fact that we so easily borrow to cover those costs is insane.

        • Bibliovore says:

          You’re correct about room and board on the one hand, but on the other, college can complicate those costs. Many schools require students to live in the dormitories for at least their freshman year and sometimes beyond, and to have a dorm meal plan while doing so. Prices for those are set by the school, and when they’re mandatory, students cannot economize on them.

          On the work front, student jobs that have sufficiently flexible hours to fit around classes and papers and term breaks rarely pay very well. While it’s certainly possible for a full-time student to work a full-time job, doing so can (and often does) negatively affect schoolwork, especially for students who weren’t getting scholarship-earning marks in the first place. Full-time work plus full-time school essentially comes down to two full-time jobs, one that earns some money and one that costs a lot. When a lot of work hours are needed just to pay for tuition and books, room and board expenses can also be problematic, far more so than when not in school.

          • Not Given says:

            Do 2 year community colleges even have dorms? The one closest to me doesn’t. Who would require a junior to live in a dorm? Live at home or rent a room or an apartment somewhere else, for a couple of years attend a small local school without a dorm. After that, enroll in your chosen school for the degree.

        • Loias supports harsher punishments against corporations says:

          Student jobs pay enough for ancilliary expenses, not usually living expenses.

        • DrPizza says:

          A lot of students continue to live with their parents when attending local community colleges. Apparently, you’re out of touch with reality (as are the universities when charging for room and board – well, they’re not out of reality – they realize that the reality is that they can charge significantly more than what it would actually cost a freshman for an apartment and food, while REQUIRING students to live on campus for at least their first year, if not more. A bedroom shared with 1 or 2 other people, along with a bathroom shared by 30 or more people costs more than $1000 a month?! It does on many college campuses. Ditto their meal plans – students are required to purchase meal plans, and the prices are built in with as much profit (or more) built into them as any restaurant has. In essence, the universities are saying, “we require you to pay rent based on the most expensive place you can find to rent within 50 miles, and we require you to go to a restaurant for every one of your meals. But, we’re going to provide you with inferior living conditions and inferior food.”

          I can understand your point – perhaps not allow loans for all of such expenses. You’re expected to cover the first $xxx of this cost. But, in reality, that’s already true for the majority of students.

      • Costner says:

        I can’t speak for anyone else, but I asdie from $2,000 I was given when my grandfather died, I worked my way through school and paid for it as I went with zero student loans. I didn’t get any scholarships either.

        What I did was get realistic about what schools I could afford. I had been working for several years in high school (and saving my income) so I had a decent starting point. I started off at a technical school where I was able to take some general courses – and I was able to continue to work throughout school which coupled with my savings allowed me to stay ahead of the tuition bills.

        I also worked two jobs in the summer to create a buffer. Then I transferred to a traditional four-year state school and continued to take classes. I worked full time and went to school part time and/or full time for several years. Eventually I found a job that offered some tuition reimbursement, so that allowed me to continue to take classes on their dime.

        In the end I took about nine years to get my associates and bachelor degrees… where most students if they went full time and didn’t work could proabaly have done that in six to seven years. However, the little extra time it took resulted in me not having a single dime in student loans – so I think it was more than worth it.

        I have a cousin who is a doctor and she never had a dime of loans either – because she signed up with the Air Force and they paid for her education. She served a few years and then left – with zero debt.

        I have another family member who went into the military first and then later collected the GI Bill to pay for his education. He stayed in the National Guard throughout the process which helped pay for most of it, and in the end he wasn’t stuck with huge loans either.

        It can happen if people want to work for it. There are options.

        • Bativac says:

          Yeah there are, but not many people are willing to downsize their dreams of going to this school or that school, or put it off to work and save a little money. My wife and I both worked our way thru college back in the early 2000s (though she had to borrow a little). We kept it affordable by going to a local state college (instead of the art school I had my heart set on).

          Of course, tuition at that state school has tripled since we graduated, so some things have changed that are out of students’ control…

        • Gehasst says:

          Ditto that. I had 2 jobs in the fall/spring terms of college, and 3 jobs while taking night classes during the summer. Some folks have drive to succeed, others just want everything given to them.

        • Timbojones says:

          If you are poor and smart, it is usually cheaper to go to a private school than a state school. Private schools have more money to throw into merit- and need-based grants. I got my Bachelor’s in four years and paid for books, food, travel, and less than $10k in uncovered tuition. IIRC, full tuition was about $30k per year.

    • sponica says:

      that and you CAN release a cosigner, once you’ve made two consecutive years of on time payments…a lot of borrowers don’t realize this

      I’m not sure where in repayment this student was, but once I get to month 24 of on time payment (at the full amount), I’m filing my cosigner release form…

      and the cosigner should ONLY have been on the hook for the FIRST loan…

      I would contact Citibank and see if grandpa cosigned a loan for 70k, or is only on the hook for the first loan of that 70k. My grandmother cosigned a private loan for me, but she’s not on the hook for my ENTIRE Sallie Mae debt.

      • Thorzdad says:

        That’s not entirely true, and is up to whatever terms the lender has in-place. Often, there are additional requirements for releasing a cosigner. For instance, I know of one lender who requires the payer to convert their payments to direct-withdrawal before they will release a cosigner.

    • libwitch says:

      This.

  2. JJFIII says:

    Tell the grandfather not to pay it. He is 80 years old. Is he worried about his future credit worthiness? Just ignore the bills when they come in. By the time it goes through collections, and they decide to sue him, the estate will deal with it.

    • Bativac says:

      This is what my uncle (who is a financial planner) decided with my 82 year old grandmother regarding some outstanding debt. Yeah, her credit may go bad for the next few years. And? How many loans are octegenarians taking out?

      • Here to ruin your groove says:

        That’s what I was thinking as well, at 80 he is more than likely able to take the debt to the grave, but the jerk in me is thinking they may be trying this public shaming to protect potential inheritance. :/

    • Thyme for an edit button says:

      Yeah, this. Who cares if his credit is bad?

      Also, if he gets Social Security income, he should check out information on amounts that may be exempt from levy in an account that gets Social Security income.

      He should probably talk to a lawyer to plan this situation out.

    • RedOryx says:

      “By the time it goes through collections, and they decide to sue him, the estate will deal with it.”

      Oh that’s nice. Leave it for his estate to deal with after he’s dead. Look, I know it sucks, but he co-signed and this is what happens.

      • Cat says:

        Yes, talk to a lawyer.
        Grampa needs to divest himself of all his assets, and put all he can in a trust that can’t be touched so he has nothing left in his estate that can be taken.

        • StarKillerX says:

          Yes because we can’t expect people to be response for their own decisions now can we?

        • Bsamm09 says:

          That will be tricky. If he has a house and puts it into the trust but continues to live in it, that house should be brought back into the estate. At least for tax reasons. Not sure if that goes for creditors too but I’d assume it does. 26 USC §2036

          Also, if he is 80 he better act fast. Time is a big factor in trusts.

    • longfeltwant says:

      My guess is he’s worried about his estate. Creditors get first dibs before inheritance.

  3. bhr says:

    It’s not a legal gray area, nor should they automatically write off the loans.

    I am sorry for Jessica’s loss, but if you cosign a loan you are responsible for it, regardless of whether the student passed away, quit school or never got a job.

    That said, there are a number of avenues for the grandfather to take to avoid the payments, including bankruptcy or just ignoring the payments (unless there is a significant estate there isn’t much the lender can do to an 80 year old). A lawyer, preferably one who deals with seniors/estate issues should be your first call.

    • The Brad says:

      Bankruptcy doesn’t forgive student loans. It’s one of the few debts that doesn’t go away after declarinf bankruptcy.

      • caradrake says:

        I know that applies to federal student loans – does it also apply to private loans?

        • bitplayer says:

          Private loans get treated just like federal loans regarding bankruptcy, nice give back to the banking industry.

      • milrtime83 says:

        I think that’s only the case for federal (Stafford) student loans. This is essentially just a private loan. The fact that she used it on college is irrelevant.

      • Jackie_Treehorn says:

        Bankruptcy most certainly can dissolve student loans. It’s a helluva lot harder than getting Credit Cards taken off the record but it can be done.

      • Tacojelly says:

        The trick is that you have to move the debt over to a form that is protected. Refinancing with a private loan or paying it off with credit cards would certainly allow you declare bankruptcy.

        Having 70,000 in available credit could be tough, hopefully this man has been diligently gaining credit over the years.

  4. GMFish says:

    What do people think co-signing a loan means?! It means that if the borrower can’t pay it back, you will! Why should the bank be out $70,000 when it protected itself by demanding a co-signer? Why should the co-signer get out of the loan even though he agreed to pay it?

    People, if you don’t want to be responsible for the loan, DON’T FRICKEN CO-SIGN!!!!

    • jeb says:

      Because typically co-signing means adding some security to the loan. Usually death means that the loans are forgiven…at least my private loans (well, through the Bank of North Dakota) are written that way.

    • Jevia says:

      Also because a lot of places won’t give a “student loan” to someone without a job without a co-signer. When my husband tried to get a student loan, he needed a co-signer and even I wasn’t good enough. A relative, whom we asked to co-sign, ended up just loaning us the money herself, at a far less interest rate.

  5. Here to ruin your groove says:

    Just like the last case of this posted here, it’s hard for me to chastise Citi for wanting to get paid when they provided the service. It’s a sad situation but I can’t agree that the loan should be forgiven or reduced.

    It’s not like you can ask the school/apartment/book sellers for a refund due to special circumstances either.

    Either way, condolences. This must be a tough time for the family.

  6. jerry101 says:

    If you have debt like this, get a term life insurance policy. In a situation like this, the grandfather could have taken out a policy on the woman for $70k or more, then been able to pay off the balance when the unlikely occurrence of her death happened. Term life on a young person for $100k or less isn’t that expensive in comparison to $70k in unsecured loan principal.

    I’m not blaming the op, this is a terrible situation and more evidence that the big banks must die.

    This is advice for anyone who is either borrowing a lot or who is consigning on a big loan like this.

    It’s called insurance for a reason. And, if the death is shady in any wy, the life insurance company might send Johnny Dollar to investigate.

  7. aleck says:

    Co-signing a loan is a legal contract, not a matter of formality or “helping out”. I am sure it says somewhere that if the signer dies, co-signer takes over the responsibility. I feel bad for the family, still, the contract is what it is. You sign it and you are responsible for it.

    “Co-signing a younger relative’s private student loans doesn’t seem like such a reckless idea”. Considering how many student loans go unpaid and the job situation now, this is not a sure bet at all. It is less reckless than loaning somebody money to buy lottery tickets, but still.

  8. rovingbandit says:

    “but collecting interest on a dead woman’s loans to make a profit just seems cruel.”

    As already stated this is where the OP’s, and most people’s assumptions are wrong. It’s not her loan, its their loan. He co-signed for it.

  9. fsnuffer says:

    I have an idea, you cosign for a large loan, have them take out a 20 year term policy and have you as the beneficiary. In this case, if she was healthy, a 100K term policy probably would have been under $15/month.

    • hmburgers says:

      This is the answer.

      If you’re going to take out a loan like this, and going to have someone co-sign, then you agree to maintain a life insurance policy with them listed as the beneficiary… it’s not wasted money, it’s insurance. And in a case like this it matters.

      Now, it’s also possible that the grandfather has basically no assets… my grandmother had virtually nothing but her possessions from age 80 to her death 14 years later. She lived month to month in government subsidized elderly housing, everything was paid in cash or postal money order. For a person like her, co-signing a loan would not be an issue because there would be nothing they could take. Perhaps this grandfather is in a similar situation, there is not going to be an estate with an assets to be taken, so they were willing to take this chance.

  10. milrtime83 says:

    This is what life insurance is for. A 10 or 20 year term life policy is fairly cheap for a healthy college age person.

  11. momtimestwo says:

    Like Judge Judy has always said “Never co-sign for a loan unless you are prepared to pay for that loan”.

  12. Blueskylaw says:

    If you co-sign a loan, especially one that large, your financial future is at stake. All fate has to do is smile the wrong way and you are screwed because banks aren’t know for being compassionate. There are other sources of money out there for higher education and as much as the family wants to help out, the safest thing to do is to fund your education through these other sources and if you want to help, slip them a couple of hundred dollars every now and then to help with expenses.

  13. crispyduck13 says:

    I think there should be a new rule for co-signing on loans for other people: make that person sign the waiver required for you to take out a life insurance policy on them in return. That way, horrible situations like this are slightly less painful.

    There is no good ending here, no matter how much pointless debate follows.

  14. LabanDenter says:

    If the granddaughter was responsible she would have taken out a life insurance policy to protect the grandpa.

  15. druidicawen says:

    I’m surprised they let such an elderly person co-sign on such a big loan.

    • Nobody can say "Teehee" with a straight face says:

      Couldn’t they collect the debt on the estate if/after they die? My first initial reaction was that this was the family of the grandfather trying to get the debt absolved to protect their potential inheritance… But it looks like the letter writer isn’t even related to the girl/grandfather in question.

      • Bsamm09 says:

        If I were the lender, I would be worried about the co-signer dying long before the student. If the safest person on the loan most likely won’t be around for the whole term, why would they allow him to sign?

    • sponica says:

      I’m confused as to why he’s a cosigner on a 70k loan and not some portion of that 70k. Granted my loan that’s cosigned is through Sallie Mae, but my grandmother is only a cosigner on 10k of the 50k I owe Sallie Mae.

  16. blinky says:

    I’m not sure what cosigning is supposed to mean if it doesn’t mean being responsible for the loan. Did grandpaw think he was signing a birthday card?

    I wonder if buying a life insurance policy on the student might be a good idea in such cases.

  17. misterfweem says:

    This reminds me of the time I was walking down the street and had two teenage boys approach me and ask if I’d co-sign a car loan for them. I still laugh out loud every time I think of it.

    • StarKillerX says:

      Seriously?

      I’ve had people I know, at least casually, but never a stranger.

      • misterfweem says:

        Seriously. It blew my mind. That’s what made saying “I don’t think that’s a great idea,” laughing, and walking off, leaving them in the snow without a co-signer still makes me chuckle.

        • misterfweem says:

          Oops. Serious grammar derp there. I will go bash my head with a dictionary, grammar nazis.

        • StarKillerX says:

          LOL!

          Yeah, I’m not sure I’d even be able to recover enough to actually say no before I started laughing hysterically.

  18. winstonthorne says:

    NEVER CO-SIGN ANYTHING EVER.

    The end. This sucks for the poor old guy – I have private loans and I know how horrible they are.

    *(Except with a legal spouse to get a better rate on a joint asset that would be considered “marital property” anyway – i.e. a car).

  19. Extended-Warranty says:

    Why do so many people think that businesses should write off huge amounts such as $70,000 for good will?

    It’s already been said, but I will say it again. Never co-sign for a loan.

    • chargernj says:

      “huge amount” is a relative term. Huge for you and me, for Citit, it’s a small amount.

  20. StarKillerX says:

    So basically “Private Student Loans Are A Dangerous Game” because the lender will actually want you to pay the money back?

    While loosing a member of your family is horrible, I’m curious why any business should forgive a debt because of it?

    Seems to me bashing them for this is just another example of people wanting to be kind and generous with other people’s money.

    • Loias supports harsher punishments against corporations says:

      Not disagreeing here, but lending money is supposed to be a gamble for the lender, too. Like, when someone dies, defaults, or just doesn’t make enough money to garnish.

      • RedOryx says:

        But isn’t that why they have co-signers? To minimize how much they, the lender, are gambling?

        • Loias supports harsher punishments against corporations says:

          Yes. That’s why I wasn’t disagreeing. Just pointing out risk exists on both sides, though definitely favoring the lender.

          • StarKillerX says:

            And there still is a risk of defaulting even with a co-signer, and I’m not sure about student loans but any significant loan I’ve taken out for a house or a car one of my options was death and disability insurance.

            I’m curious, you say “lending money is supposed to be a gamble for the lender, too” but how exactly is it a risk for the person borrowing the money? Sure there is a risk for the co-signer but that’s between them and the borrower.

  21. Loias supports harsher punishments against corporations says:

    If he’s 80, he’s probably not working. If that’s the case, he may not have any income that can be garnished to pay back this loan. He might be better off just not paying it. The downside would be that his estate would likely have to pay it when he died.

  22. Costner says:

    I recalled a few years ago that Wells Fargo enacted a policy that wrote off the debts if a student died, so I googled it and sure enough they do. In fact, they even write off loans of students who are permanently disabled.

    See for yourself: https://www.wellsfargo.com/press/2010/20101217_EFS

    Sallie Mae does the same thing on some of their loans althought it seems there are restrictions in certain states for some reason (http://go.salliemae.com/content/for-schools/products/smart-option-student-loan.aspx).

    Seems like Citibank needs to get with the program. When you have other mega banks / financial institutions offering such a benefit, it stands to reason they need to match it or people will take their business elsewhere. Then again nobody expects to need this type of a benefit, but if you are going to co-sign a student loan for someone, you better go to a place that offers such a benefit.

    I know there are a lot of people here shouting “don’t ever cosign a loan” and although that is great advice… come talk to me when your teenager wants to go to collect and federal loans don’t quite cover the need. The “never cosign” concept sounds great in principle, but in practice it is much more difficult. We aren’t talkingabout cosigning for a new car or a mortgage here… we are talking about an education.

  23. Bsamm09 says:

    OP is going to have a rough life. Everyone has a sad story as to why they think they shouldn’t have to adhere to the terms of contracts they sign.

    Before you sign anything, know what the worst case scenario is. If you can’t live with that, don’t sign it. Being a co-signer should create allow you to have an insurable interest even in a non-relative.

  24. Papa Midnight says:

    I remember when I first was getting ready to go to college out of high school, the very first thing I was told was do not sign up for ANY private student loans under any circumstances.

    • Costner says:

      So once you max out the available federal student loans you might qualify for… and assuming you don’t have a trust fund or parents who agree to pay for your education – how exactly are you going to pay for school?

      Private student loans are necessary for a LOT of people. Depending upon income of the parents and any savings a person might have, they are end up being almost the only option available. Plus, some private loans are actually better deals than some federal loans (like those parent loans), so in some cases they make sense.

      • crashfrog says:

        Go to a cheaper school? There are maybe ten private universities in the entire country, maybe, whose name has such incomparable cachet that they’re worth the enormous tuition. Everything else, nobody is going to care if you went to Wesleyan College or the University of Toronto. And for STEM fields, the cheaper public research universities actually offer a far better education, because you’re likelier to get exposure to lab equipment and research practices that are current in those fields.

        Study after study shows basically no difference in educational outcomes between research universities (“state schools”) and private universities and colleges that isn’t a function of admissions practices. Your benefit as the student is the same either way. It’s stupid to pay the incredible overinflated private school premium for the same education, unless the degree says “Harvard” or “MIT” on it. College really is a place where you can save some money.

        • StarKillerX says:

          I might disagree for advanced degrees since even if the education you recieve is actually no difference the name recognition can do wonders for your career and earning potential but for Bachelor’s degrees, such as the loan taker in this story, I would agree completely.

        • Costner says:

          I don’t disagree with you on that point, but even state school can be expensive and when something like a Stafford loan only allows $3,500 a year for 1st year students you can’t expect it to cover all of the expenses.

          I didn’t take out any loans for myself, and I worked my way through school which resulted in it taking a few years longer, but for those who are determined to go straight from high school to a University and go straight through for four or five years, they may end up needing some loans, and government loans aren’t going to be enough in most cases.

        • delicatedisarray says:

          The actual experience at the school needs to be looked at too. I attended a private University and was willing to pay a little more for what I was going to get.

          Class size was a big deal to me, I currently work at a University that has 50,000 students- I attended a University that had 1,500. My largest class was 28 people (not counting band which 100+). My student workers now talk about being in classes of 300 students. That was not the type of education I wanted. I wanted one on one with my professors, I wanted them to know my name, I wanted that close community, so I paid extra for it and it was worth every penny. If that isn’t something you are looking for then I think attending a state University is worth it because of the price point.

          Granted the private University I attended is only $4,362 more than the state named state university. So it wasn’t an astronomically priced private school.

          • crazydavythe1st says:

            I don’t understand the idea that you can’t have one on one time with your professor even in a class of 300.

            Professors are generally required to have office hours and most of the time I went it would be only 2-3 other students. Even in the most difficult classes where there would be 20 students or so in line, you would get a good 20 minutes or so per day with the professor. If you went every time office hours were offered, you would get a good hour with the professor every week. Most of the professors had policies where if you were going to all their office hours and still needed help that would set aside even more time just for you.

            This doesn’t include teaching assistants and grad students which are often more than qualified to assist as well.

            Private schools are overrated.

            • delicatedisarray says:

              My husband is in grad school at the same university I work at. It is near impossible for him to get in and speak with the professor that heads his lab. I also hear from my student workers about how difficult it is to get in sometimes or their professors who hold their office hours in the virtual world instead of the real one.

              I had, and still have, some of my professors cell phone numbers. We had classes at professors homes. My painting professor let me use the shop at his house because the University didn’t have some tools I needed. I can keep rattling off experiences that make my student workers surprised because it isn’t something they experience. The president of the University lent me his car for a week while he was on vacation one summer! It wasn’t an overrated experience for me, I know my students love the University they attend and you obviously have deep feelings about public schools also- but I love the private school I attended.

          • crashfrog says:

            I have credits from a couple of different colleges all over the country, so I feel like I’ve had both the private and public university experience. I can tell you that more professors knew my name at the public school than at the private one.

        • BurtReynolds says:

          I went to a SUNY school (cheap as a NY’er can get) and Citibank was my best option for loans that were actually mine, and could pay the bills. My “aid package” only had like $2k in unsubsidized federal loans that would be in my name. The rest was supposed to be PLUS loans.

          My Citibank loan was adjustable rate, but I got “Prime + 0″ and so my rate was 3% for the last few years. At its peak it was something like 4.5%. I just paid it off. Lucky me for low interest rates I guess.

  25. Clyde Barrow says:

    Many folks do not understand the definition of the word “co-sign”. It is just as though you took out a loan for yourself; you own it regardless of any thing that comes up. You, the co-signer, are responsible for the loan. It does not mean that you are merely representing the person taking the money.

  26. Kavatar says:

    At least they’re not The Most Dangerous Game.

  27. hmburgers says:

    Most of the loans I’ve ever taken out have had the option of a life/disability insurance policy added on at the beginning for a small fee.

    Recently I took out a car loan, it’s got a $190/mo payment for 36 months. For a one time $150 premium (paid up front) they will pay my monthly bill if I’m disabled or involuntarily unemployed and they will also forgive the balance of the loan if I die.

    Do private student loans have something similar?

  28. az123 says:

    “it’s a legal grey area in terms of if Citi has to forgive them or not.”

    It is not a legal grey area, the grandfather co-signed the loan he is legally responsible to pay the loan back. People think because it is a student loan it is some magical thing? A student loan is just like any other loan, if you co-sign for it then you would be on the hook just like a car loan.

    This story is just another lets bash on the banks story… and really for no good cause. The bank protected itself by getting a co-signer on the loan and they are acting properly and legally based on that. The simple thing is that you should never co-sign a loan you cannot afford to pay back if something happens to the other signer.

  29. lovemypets00 - You'll need to forgive me, my social filter has cracked. says:

    We are a non-rich family too, and my daughter took out student loans, and I took out a parent plus loan to help her. No co-signing on either one. That way, if one of us suddenty dies, the other isn’t on the hook.

  30. EricLindros says:

    Y’all keep fighting the good fight. Co-signing a loan based on certain assumptions (that your teenaged family member won’t suddenly die) is not analagous to taking out the loan yourself, seeing as under almost any circumstances other than death or serious disability the girl would have the rest of her life (70+ years) to pay down her debt, even if she didn’t graduate or anything. Her death changes this equation, and the grandfather is under no moral obilgation to pay this debt.

    It’s strictly a business decision. Will he be better off paying down the debt or not? If not, which is likely the case here, then don’t pay it. And before you all start throwing a pity-party for Bank of America here, let’s just remember that the only reason that BoA is still in business after the financial crisis of 2008 is because it recieved, and continues to receive, MASSIVE bailouts from various arms of the government, or, in other words, our tax money.

    Think of the major money center banks as loan sharks; they don’t have the moral high-ground here. Sure, you probably want to pay them what you owe because there will be negative consequences if you don’t, but they are by no means to be pitied.

    • EricLindros says:

      Whoops, got the bank wrong. Change the “Bank of America” references to “Citibank.” The facts are the same for all the major money center banks in the United States.

    • bhr says:

      have you read the comments? Most of us said the grandfather should just ignore it/find a way not to pay it at this point, but he does have an obligation to pay on the loan.

      You are completely right though, he can make a business decision (Debt vs Estate value) but the OP is asking the bank to make a business decision to forgive a debt for no valid reason (financially, not emotionally).

      If you want to bring up bank collapses, expecting payments for loans is what keeps a bank in business, and while $70k isn’t much to forgive you have to realize that banks have literally 1000s of customers with sob stories.

  31. Maltboy wanders aimlessly through the Uncanny Valley says:

    Shame on that bank for expecting to be paid back for a loan! Let’s burn all the banks and go to a cash-only system!

    Need cash for a home, car, or education? Start saving!
    Can’t wait that long? Tough shit!

  32. Rocket80 says:

    TBH I don’t understand student loans that well – but if you got a Federal student loan co-signed by grandpa and then died he then would NOT be on the hook?

    Or is it impossible to get a cosigner on a government SL ?

  33. Tacojelly says:

    If this were me, I would put it all on credit cards then declare bankruptcy.

    The ultimate problem with student loans is that they’re impossible to fight if there isn’t clear fraud

    • Maltboy wanders aimlessly through the Uncanny Valley says:

      Why would you fight a debt you rightfully owe?

  34. sendbillmoney says:

    If you don’t want to pay someone else’s loan in the event they’re unable or unwilling to pay it, don’t sign an agreement to do so.

  35. Chiclet says:

    Would the grandfather’s estate be responsible for the loan? I’m just thinking… If you die and you don’t have a cosigner, your student loan gets forgiven. So it would seem to me that if you and your cosigner die, the loan would be forgiven. I didn’t think estates were responsible for student loans. Maybe not the case with private loans?

  36. lincolnparadox says:

    This is making me really consider hitting the scholarship circuit now, almost a decade before my kid goes to college.