If you retain one piece of information from reading this site, let it be this one: never co-sign anyone’s student loans. Not your spouse’s student loans. Not your best friend’s student loans. Not your nephew’s student loans. Not even your own child’s student loans. It is the worst possible kind of debt to assume on behalf of someone else. The balances can be huge, the debt can’t be discharged in bankruptcy, and there’s nothing to repossess. That’s what anonymous parents M and D have learned, the very hard way.

When their son graduated from college, he had a lot of debt that loan owner Sallie Mae wouldn’t allow him to consolidate. He also didn’t have a job. Years of deferments, fees, and attempts at changing his payment plan later, their son is in default. The entire balance of the loan is due. And their son just lost his job.

We’ve had problems with Sallie Mae for years. We had co-signed our sons loans and they were sold to Sallie Mae after he graduated college. They didn’t allow him to consolidate and after college my son found himself without a job. He tried to make payments on each of his 5 loans with them and took deferments. However, every time he called to try and get a change to an income based loan he was told he couldn’t do that. They added fees, and charges and called him to make deals to change his payments (none of these were ever done in writing although he requested it was told they would send it in writing.) The so called “deals” just made things worst and many times there was no documentation of the changes for lower payments. My son is paying $1200.00 a month in Sallie Mae loans. He owns nothing and rents a room and barely has money to get food. Now, after helping my son over the years with payments they said that he missed an automatic payment and the account is in default.

We checked with the bank and they reviewed the activity on my son’s account. They show no attempt made by Sallie Mae to get the payment. So, now they are coming after us with threatening phone calls and timelines. On top of that, our son lost his recent job. We are being told to pay the off the entire amount of that loan, $26,000. within two weeks. RIGHT…LIKE PEOPLE HAVE $26,000 LAYING AROUND! They are not willing to work with us nor retry his account for payment. Each time we call we get someone else and a different story but all threatening us. None of it has been done in writing, yet two people said they would allow us to pay 20% of the loan off within two weeks. Mighty nice of the jerks! Both people came up with different amounts of what was owed. Is there anyway to file grievences or sue Sallie Mae??

We are now being forced to declare Chapter 13 bankruptcy because we don’t have $26,000.00 available nor the 8,000.00 they would take as a “good-faith” payment (good-faith in them—are you serious???). We are close to retirement age and this now ruins our credit which we have always worked so hard at keeping up. It also holds us from getting any loans or credit cards for 5 years. We are literally going to be working just to make payments to Sallie Mae and lose all credit with everyone else.

Sallie Mae now owns our lifes. Can anyone help us?

Once a loan reaches default, I’m not sure that even we have the power to help rescue consumers in distress. What we do recommend is that you try calling the Sallie Mae customer advocate line, a sort of executive customer service that readers have told us is more helpful than the regular representatives.

Also, the National Consumer Law Center’s Student Loan Borrower Assistance pages offers clear-headed and helpful advice. Reading this entire site should be mandatory for every student about to take on student debt.

Want more consumer news? Visit our parent organization, Consumer Reports, for the latest on scams, recalls, and other consumer issues.