Dear Dr. Don, My son has student loans to pay with the Rhode Island Student Loan Authority, or RISLA. He is currently out of work. I am a co-signer on two of the five RISLA loans. If he stopped making payments on those student loans, would I be responsible for the payments? The other three loans were co-signed by his grandfather, but he passed away. What is the best course of action for us in this situation? He also has five separate loans through another servicer that have no co-signers. What is the best thing to do there? Thank you. -- Ann Abeyance
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Dear Ann, Yes, you are required to step up and make the payments on those student loans. RISLA loans do have a forbearance option which, once approved, does stop required loan payments for three months. After that time, you have to request another forbearance period if needed, but the agency considers the financial situation of both the primary borrower and the co-signer. If you have the means to make the payments, it isn't likely that RISLA will approve the forbearance because your son is out of work.
Your son should be proactive and work with the lenders on the other loans to discuss the options available to him while he is unemployed, including consolidating any federal student loans.
That his grandfather, as co-signer, died should have no impact on your son's obligation to repay those RISLA loans. Any federal loans through the other servicer and his RISLA loans that weren't co-signed by you may be eligible for deferment or forbearance. Private student loans may or may not have deferment or forbearance provisions. Even if there are deferment or forbearance provisions available, the interest expense is added to the loan balance. So these options are, at best, temporary solutions.
For loans that aren't eligible for deferment or forbearance, you have to decide if you're willing to help your son out with the loan payments so the loan balances don't grow by the missed interest payments, and so the loans don't go into default and ruin your son's credit history. It's nearly impossible to discharge student loans in bankruptcy, so the loans aren't going anywhere.
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