Caution before co-signing on a student loan - WSFA.com Montgomery Alabama news.

Consumer Alert: Caution before co-signing on a student loan

(WOIO) -

Are you trying to figure out how to pay for your child's college tuition? If you're thinking about co-signing on a student loan, there's information that you should know before you sign on the dotted line.

A whopping two-thirds of undergrads now graduate with student loan debt, totaling $1 trillion waiting to be paid back. For the first time ever the student loan default rate now exceeds credit card delinquency rate.

The average interest rate at graduation has increased and unemployment rate is high.  The amount of debt increasing each year making makes it even more difficult for students to be able to afford their student loans.

Nowadays if loans are private, more often than not there's more than one signature on the bottom.

"More than 90 percent of new borrowers have a cosigner on their student loan, that's up from less than half before the credit crisis," According to Mark Kantrowitz, of FinAid.org.

So what options do you have if your child defaults and you cosigned? Attorney Ann Margaret Carrozza suggests you contact the lender immediately and ask for an interest rate adjustment deferment.  This gives you a temporary reprieve from the payments where the interest does not accumulate or forbearance where the payments are temporarily suspended but the interest still accumulates. No matter what, a default can put a lot of stress on a family.

Experts say families should be sure they've exhausted all federal loan possibilities before taking out a private student loan.

It's usually difficult to get student loans dismissed in bankruptcy court.

Copyright 2013 WOIO. All rights reserved.

  • NewsMore>>

  • US Marines' bravery celebrated 100 years after French battle

    US Marines' bravery celebrated 100 years after French battle

    Sunday, May 27 2018 8:04 AM EDT2018-05-27 12:04:22 GMT
    Sunday, May 27 2018 5:45 PM EDT2018-05-27 21:45:21 GMT
    (AP Photo/Virginia Mayo). U.S. Marine Corps soldiers stand beneath the U.S. flag during a Memorial Day commemoration at the Aisne-Marne American Cemetery in Belleau, France, Sunday, May 27, 2018.(AP Photo/Virginia Mayo). U.S. Marine Corps soldiers stand beneath the U.S. flag during a Memorial Day commemoration at the Aisne-Marne American Cemetery in Belleau, France, Sunday, May 27, 2018.

    High-ranking military officials from the U.S., France and Germany have taken part in Memorial Day ceremonies at an American cemetery in northern France to mark the centennial of the battle of Belleau Wood, a key...

    More >>

    High-ranking military officials from the U.S., France and Germany have taken part in Memorial Day ceremonies at an American cemetery in northern France to mark the centennial of the battle of Belleau Wood, a key moment in Marine Corps history.

    More >>
  • Freed after 2 years, man jailed in Venezuela returns to US

    Freed after 2 years, man jailed in Venezuela returns to US

    Saturday, May 26 2018 9:53 AM EDT2018-05-26 13:53:22 GMT
    Sunday, May 27 2018 5:45 PM EDT2018-05-27 21:45:10 GMT
    Senator Corker’s office tweeted out an image of Josh Holt and his wife before leaving Venezuela. (Source: Twitter/@SenBobCorker)Senator Corker’s office tweeted out an image of Josh Holt and his wife before leaving Venezuela. (Source: Twitter/@SenBobCorker)

    A Utah man has been released from a jail in Venezuela after spending nearly two years behind bars on weapons charges.

    More >>

    A Utah man has been released from a jail in Venezuela after spending nearly two years behind bars on weapons charges.

    More >>
  • Sting receives honorary degree, sings at Brown University

    Sting receives honorary degree, sings at Brown University

    Sunday, May 27 2018 1:04 PM EDT2018-05-27 17:04:32 GMT
    Sunday, May 27 2018 5:44 PM EDT2018-05-27 21:44:33 GMT
    (Photo by Amy Sussman/Invision/AP, File). FILE - In a Jan. 25, 2018 file photo, Sting attends Spotify's Best New Artists 2018 Party at Skylight Clarkson Square, in New York. Brown University confers an honorary degree on rocker Sting at its 250th comme...(Photo by Amy Sussman/Invision/AP, File). FILE - In a Jan. 25, 2018 file photo, Sting attends Spotify's Best New Artists 2018 Party at Skylight Clarkson Square, in New York. Brown University confers an honorary degree on rocker Sting at its 250th comme...

    Ivy League school Brown University will bestow an honorary degree to English musician Sting.

    More >>

    Ivy League school Brown University will bestow an honorary degree to English musician Sting.

    More >>
Powered by Frankly