Of course you want to help a beloved grandchild to succeed, or assist a child with their first home mortgage, however you may be placing your own retirement in jeopardy by becoming a co-signature on any loan.
Our friends at Investopedia offer the same advice about avoiding student loan debt as a co-signer. If you are tempted to sign that document, read the article:
Seniors: Before You Co-sign That Student Loan by Anne Mollegen Smith (January 10, 2017) Investopedia
According to the article - The simple truth is that it is possible to have your social security benefits garnished if the student loan goes into default and you are a co-signer…”In 2015, 40,000 borrowers aged 65+ had their Social Security benefits garnished to pay back federal student loans. Since only the federal government can garnish Social Security benefits for this purpose, this figure does not include all of those who are behind on private student loan payments.”
According to an article (RothIRA.com) by Jim Probasco titled: Student Loan Debt and Social Security – “From 2005 to 2015 the number of people age 60 and older with student loan debt quadrupled to nearly 2.8 million, according to the Consumer Financial Protection Bureau (CFPB). Almost 40 percent of people over age 65 with student loan debt are in default.”
And it follows: “…perhaps the main reason for so much senior student loan debt is that parents and grandparents borrowed or cosigned to finance college for children and grandchildren.”
For your peace of mind, seek other methods to assist a family member to gain higher education, particularly as you approach retirement age.
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