My daughter does not want to pay back her college loans

Parents Forum
1

<p>I don't want to get into the specifics about this problem, because it is sensitive and painful. I am also changing some of the details to protect my anonymity. Here is the crux of the problem</p>

<p>My daughter attended to a top 10 LAC. It was her dream school. When she was admitted, she begged us to let her go. We are not wealthy, and we qualified for financial aid. Some of the aid came in the form of loans. She was also accepted into honors programs at some of the schools to which she applied, where she would have received a full ride. But she begged us, with tears in her eyes, to let her go to her dream school. I tried to explain to her what loans will mean to her in the future, but she didn't care. I doubt that she understood - what 18 year old really understands how onerous loans can be. But I think I made it clear to her that the loans were her obligation, not her fathers and mine.</p>

<p>Fast forward. She is not in school any more. She studied anthropology. She has yet to secure a job. I don't know how hard she is trying to get a job. Her college loans will come due shortly. She will also no longer qualify for medical insurance, which she needs, because she has a chronic medical condition (which was part of the reason we gave in to her to go to the LAC). I'm figuring that the combined hit of these two financial obligations is gong to come to at least $1,000 a month.</p>

<p>My husband and I are worried about this. Our daughter said that she plans to get an apartment when she gets a job. I said to her that she has these obligations, which come first. She went ballistic (again, there are family dynamics that are sensitive for me to talk about).</p>

<p>So my question is not who is going to pay the loans. Either my daughter or my husband and I are going to pay the loans. Since we co-signed the loans, we are obligated to pay. And we will live up to our obligations.</p>

<p>But how will this reflect on her credit rating? What is the process? Does she first default on the loans, and then we pay?</p>

<p>On one hand, I don't want her credit rating ruined. On the other, I don't see why she should be rewarded for defaulting on her loans. If we pay, we assume all of the responsibility, while she has the money that should have been spent to pay her loans to use as she wishes. What lesson does she learn from that?</p>

<p>The same goes for health insurance. She needs it. As does everyone, but lets not go there. I can't let her be without health insurance.</p>

<p>I don't know where to go from here. I love her, and I want her to be OK. But I tried to explain to her that I am scared, that adults can also be afraid and confused and lost. We are not rich. We already struggle, and we have other financial obligations, not to mention the fact that she as siblings that also need to go to college. I know she hates me because I expect her to help out with these obligations. If we assume her obligations, does she suffer any consequences?</p>

2

<p>The main consequence would be that your daughter will learn to become more and more dependent on you, which obviously is very tough in your situation. I would normally say to teach her some tough love, but with a chronic medical condition, you're right: she can't be without health insurance. </p>

<p>You say that she has "yet to secure a job." Do you mean in the field of anthropology, or is she just sitting at home all day? If she is, make her get a job!</p>

<p>Unfortunately, the sad reality of student loans are that they can come around and bite you in the rear. My aunt, who recently became a senior citizen at age 55, is still paying off student loans incurred over thirty years ago.</p>

<p>EDIT: I cross-posted with latetoschool, who's right. Maybe you can pay them off now and work out some kind of pay-back system?</p>

3

<p>If you cosigned on the loans, I do not see where you have any choice but to pay them back, starting when they are due. Any other course of action will ruin your credit rating, which in turn will have disastrous impact on all other areas of your life. A compromised credit rating can even increase your car insurance, cause credit card companies to raise your interest rates (even if you have always paid THEM on time), etc. I do understand that this rewards her and lets her off the hook for the obligation, plus it actually helps her credit rating, however, I do not see how you can possibly afford to allow YOUR credit rating to be ruined.</p>

4

<p>I tend to feel empathy for a young person who is walking out in the world already saddled with $1000 worth of bills to pay every month, before they've even started. It must be frightening and depressing.</p>

<p>Having said that, her reaction seems more selfish than sad. (Going ballistic... not speaking to you?) If it were my sons, I would probably try to work something out in the interim (IF they were acting reasonable), like splitting the pain somehow, just because I know how awful it would be to try to set yourself up in an apartment and start a career with such a burden. However, it doesn't sound like this would work with someone who doesn't want to be considerate to your needs at all. Or would it?</p>

5

<p>Wow, do I feel for you. I think every kid who is thinking of taking on loans for college should read your story and think about the long-term implications of their commitment. </p>

<p>My D also chose a private LAC over an honors program with scholarship at a state school. H and I supported her decision but did insist that she take the Stafford loans. We did not qualify for fin aid but do not have money to burn. She is employed and is paying off her loans at $100/month.</p>

<p>I don't think you should let your D off the hook because she now regrets the natural consequences of her choice. I am concerned with the following:

[quote]
I don't know how hard she is trying to get a job

[/quote]
and
[quote]

We are not rich. We already struggle, and we have other financial obligations, not to mention the fact that she as siblings that also need to go to college. I know she hates me because I expect her to help out with these obligations. If we assume her obligations, does she suffer any consequences?

[/quote]
Why are you, who have other financial challenges as well as other kids to educate, trying so hard to assure that your D does not "suffer any consequences?" I say, let her suffer some of the consequences. Don't bail her out. She needs to figure out how to get a job with health insurance and the means to pay back her loans. Perhaps that means living at home for a while rather than taking an apartment. </p>

<p>Sorry to sound harsh, and I really do feel for you, but I don't think you should let this kid shirk her responsibility so easily. You say you made it clear to her that the loans were HER responsibility. That will be undermined if you step in to pay them.</p>

<p>P.S. Other posters made good points that since you did cosign you do have an obligation, as well as a risk to your own credit. But I would still do whatever I could to steer the primary obligation to the kid first.<br>
Again, a sobering tale. Please keep us posted on what is worked out.</p>

6

<p>About the job,
When I first got out of college, I wanted to return to Florida. Five months passed before I got a "real" salaried professional position. In the meantime, I worked as a president's assistant for a resort, a job I obtained within a week of returning home (much to my parent's horror). I didn't make much money, but I lived at home, so I was able to save and pay back some loans I took from my grandma. Looking back now, that 5 months was the best thing that could have happened because I paid back my grandma, and saved enough that I could set myself up in my own apartment and buy a car.</p>

<p>Even if your daughter can't find a career-job right now, doesn't mean she can't work somewhere, even if it's a temporary "step down". I don't understand that.</p>

7

<p>I think paying back her loans for her just perpetuates an obvious problem. She needs to get a job immediately - even if it is WalMart - and deal with her adult obligations.</p>

8

<p>As a condition for providing financial assistance, I would require your daughter to get a job immediately--not to wait for a job she wants, or thinks that she will like, but a job--even if it is flipping burgers. The point is that unglamorous, low-paid jobs are always available, and she needs to suck it up and deal to a certain extent--fancy LAC degree or not.</p>

9

<p>However, I can't make her get a job, nor can I make someone hire her.</p>

<p>I agree that she can take any job, and not just a career job. But she refuses to do that.</p>

<p>I also agree that she is very selfish. And immature. And Unrealistic.</p>

<p>Again, I don't want to get into the dynamics of this. I fully understand that someone has to pay back the loans. I was really just asking a financial question.</p>

<p>As an aside, don't all student loan applications require a co-signer? Surely I can't be the only parent in this situation. If the student does not pay back the loan, does the co-signer suffer the same consequences as the student?</p>

10

<p>I also do not want to sound harsh, be it seems the seeds of this problem started years ago. Her behavior is abysmal imho but many parents have been enablers reinforcing poor behavior since their children were young. </p>

<p>You saw the college options offered to her as a high school senior but gave in to her wishes even though you knew the dangers of large student loans. That was when you needed to act by refusing to co-sign for the loans and forcing her to make the appropriate choice. </p>

<p>Unless there is a miraculous change in her behavior, you will be forced to repay the loans and she will find herself in similar situations in the future. Your intervention need to end there now.</p>

11

<p>Over a year ago, I started a thread entitled, "Should you incur substantial debt for your dream school?" See <a href="http://talk.collegeconfidential.com/showthread.php?t=326598%5B/url%5D"&gt;http://talk.collegeconfidential.com/showthread.php?t=326598&lt;/a&gt;&lt;/p>

<p>It was a featured thread on the Parent's forum,but sadly, ignoring my request, CC eventually took it down thinking that people would eventually find this thread, as dumb as that sounds. It is posts like this that remind me that they should have made it a permanent sticky thread.</p>

<p>I don't know what to tell you. If you cosigned on the loan, you need to pay it back. It is sad that she incurred the loans to begin with. CC is MUCH too full of both students and parents who believe that top kids should attend a top school at any cost.</p>

12

<p>The prospect of having to pay $1000 per month from a starting salary can be crippling. No job will look good enough. In the meantime, the loans must be paid or your own credit rating will suffer.</p>

<p>So suggest that your daughter take a job--any job--while looking for something more permanent and better paying. She needs to contribute at least to your household expenses while you begin to start paying off her loans. Try to work out a level of contribution commensurate with what she is earning so that she is gradually paying back what you are advancing to her.
Remind her that an anthropology degree is a general degree; it does not qualify her for a specific kind of jobs, but should have given her skills that are useful in a variety of jobs. She can look for work as a secretary or a receptionist, or wait on tables, do landscape gardening, whatever comes along. The important thing right now for her is that she get a job and for you, unfortunately, that you begin paying back those loans.</p>

13

<p>There are many issues here in which you are reluctant to provide sufficient background in order for me to comment on what I might consider a solution.</p>

<p>In the absence of those details, I'll just say that some people expect everything to be done for them. They are selfish, they are sponges. That may or may not be the case with your d.</p>

<p>Now regards the loans- if she does not pay, quite clearly you can. If you want to protect her credit rating (and yours), by all means do so. </p>

<p>Consider these points:</p>

<p>The lending institution does not give a hoot whose signature is on the check.</p>

<p>Do you have access to all info, payment schedules, etc, online accounts? Without notifying the lender, you can quietly assume making payments for d without notifying the bank; they're assuming she's making payments, not you.
But all the correspondence and bills, online access is in her name. Will she give you full access?</p>

<p>To avoid any issues, make the first, and all subsequent payments on time. Do not start off behind.</p>

<p>The year end interest summary will also be in her name. By rights, you probably cannot technically claim the education interest deduction on your taxes.</p>

<p>You would have to contact the lending institutions directly if you want to assume primary responsibility. I would be reluctant to go that route... it may adversely effect your d's credit rating, or result in a renegotiated loan in your name with potentially higher interest.</p>

<p>There are deferrments, lower payments and longer terms available for those with federal loans who cannot pay. Investigate those options.</p>

<p>I'm not a tax professional or banker. The above are just some thoughts based on my knowledge of the student lending process having sent my two through school with a mix of federal loans (for both parents and students.)</p>

<p>You have other issues. You mention an apartment. If she does get a job, she still may need a lease cosigner. I personally would not cosign a lease for her if I were in your shoes. I also would never cosign anything (credit card app, car loan, or birthday card) for somelike like your d.</p>

<p>She took advantage of you once, with the choice of college. She has not lived up to her end of the bargain. You, as cosigner, are as financially responsible as she. She wants all the benefits of adulthood while being able to pick and choose which of those responsibilities she pays for. She is jeapoardizing your financial well being and potentially her siblings educational options. </p>

<p>If her health issues are a cause of these behaviors, I am truly sorry for the burden you may be forced to bear. If they are not, you and your spouse need to come to grips with how long you intend to allow this girl to be a leech.</p>

<p>If I sound harsh, it's based on my take of the limited facts presented. Good luck.</p>

14

<p>Yes. Cut and dried. You cosigned, you pay.</p>

<p>I'm sorry things did not work out better for you.</p>

15

<p>How about this:</p>

<p>"You can get a job NOW, live at home out of the goodness of our hearts, and start paying back your loan."</p>

<p>OR</p>

<p>"You can move out as soon as we get you packed."</p>

<p>(And start hoarding boxes. ;) )</p>

16

<p>Yes, her medical condition does play a large role in this. It was a factor when we co-signed the loan. She was crying that she would be unable to cope in the institutions that offered her a free ride. Knowing her condition, I agreed, even though I still did not want co-sign the loans and I wanted her to try to go to the larger institutions. </p>

<p>Her medical condition is still a factor, and we are trying very hard to deal with it (hence the need for medical insurance, which we will not let lapse).</p>

<p>But thats the part I did not want to disclose.</p>

<p>I agree with you that I will not co-sign anything else for her.</p>

17

<p>I would recommend the intersession of professional third parties: family therapist + financial advisor. The first because the situation has obviously progressed beyond what you can handle yourself; the second because given all the details of your situation there might be a way the loan could be repackaged.</p>

<p>It's hard when we deeply love people who can't quite grasp the responsibility thing. Not only do we keep rescusing them, but we get our well-being compromised (i.e. co-signing the loan.) I probably would have done the same thing, but part of you must have known that it was a possibility that she would not step up to repay loan, particularly with a health problem. </p>

<p>Accept the fact that you loved her, wanted her to have her heart's desire and could not refuse her the LAC. Co-signing exists because the principle may not meet her obligations; therefore, as hard as this is to face, accept the fact that this is partly your responsibility. We always desperately hope our loved ones will step up to the plate, and it does hurt when they don't. Perhaps a professional voice could get her to see this. It's worth a try. </p>

<p>I do feel for you having chronically been in this situation with H. Good luck.</p>

18

<p>motherwise- </p>

<p>You have my sympathy. Having a child or parent with severe or chronic recurring health issues can be an emotional and financial drain to all involved.</p>

<p>Consider that you and spouse (and her siblings) cannot and will not be there for her forever.</p>

<p>Based on her condition, I would advise you begin to look into whatever state sponsored services and support are available that might begin to take the burden from you and begin to place it on her.</p>

<p>The quicker she can begin to assume and acknowledge her own responsibilities and abilities, the more effectively she can begin to assume responsibility for her own actions and future productive life.</p>

<p>Again, good luck.</p>

19

<p>I am assuming these loans are not Staffords or Perkins loans, but private loans. Is this correct?
If they were Staffords or Perkins loans I don't think co-signers are involved, and payments can be deferred for extended periods if the graduate is unemployed or making only a modest amount of money.</p>

20

<p>motherwise:</p>

<p>In regard to the health insurance issue, take another look at your own plan. In our state (MA), a student is insurable on the parents' family plan while in college or up to the age of 25. The college health insurance covers only emergencies. It may be possible for your daughter to continue being carried by your family plan.</p>