Dear Dr. Don, 

I had a private student loan that was discharged in bankruptcy. My mom was the co-signer and now she is stuck with the loan payments. I am paying her the amount monthly and she sends the payments to the lender. She's now two years away from retirement. Is there a way to pay off the loan or do something else like refinance it?

Thanks, 

- Robert Redux

Dear Robert,

 To eliminate the burden of the loan, it must be paid off or refinanced. She might be able to refinance with a home equity loan, which could create savings on interest, depending on the rate. That fails to address the obligation to repay the money. I'm guessing that your credit and other circumstances prevent you from borrowing in your own name to pay off the loan.

It's rare to get a student loan discharged in bankruptcy. The process merely shifted the obligation to your mom. I'm sure she appreciates that you're able to fund the loan payments after the bankruptcy. As a side note, we've written often about the risks of co-signing loans and this is another demonstration why we feel strongly about this subject.

If refinancing isn't a viable option, then you need to chip away at the principal balance by making additional payments to eventually have the loan paid off. Since I don't know the loan terms or balance, it might be an ambitious goal to pay it off in just two years.

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