How does defaulting work if the cosignor is in full disability and retired?
Posted by pinkdiamonds00@reddit | studentloandefaulters | View on Reddit | 2 comments
Planning to default next year but am trying to gather appropiate information before doing so. Currently have 120k+ with Sallie Mae and my dad being the cosignor. The plan is to default once I refinance to rid my dad of this bullshit and also not to disturb my relationship with my parents. But my dad is 70, already retired and receives disability from the military and SS. He isn't working officially but I'm worried if I default with him still assigned, they'll look at his assets and try to go for them potentially.
I live in France so I doubt they'd even try to sue me but could they go for my dad who is still in the US? Has anyone heard or experienced a situation like this before? I spoke with Sallie Mae and they won't discharge unless I pay 12 months in full or make 12 qualified principal+interest payments and rn I'm only doing interest-only but no way am I spending the rest of my life paying this debt.
Any advice or insight would be appreciated.
jonsonmac@reddit
If you’re trying to refinance $120k in loans, you’ll need a very good salary to be approved, well over $100k. And since you’re only paying interest right now, I assume you don’t make that much.
Your dad is equally liable for the debt if you default with him as a co-signer, unfortunately. This is something you’d want to discuss with him if you plan on defaulting.
BingoHighway@reddit
If you're refinancing, it means Sallie Mae will no longer be your servicer. This means you'll be under new terms and a new contract with whomever you refinance with and whatever terms you were under with Sallie Mae will no longer apply.
If you refinance with Sallie Mae and not a different lender, I'm not sure if your cosigner arrangement will carry over. But if it's any other lender, they will buy your debt from Sallie Mae and give you a new repayment agreement with new terms and rates.
Also, if the two of you live in separate countries, I don't think they'd bother your dad anyway unless the loans were taken out in the USA and were cosigned in the USA too. Student lenders love getting paid, but there's a reason people leave the USA to get away from student debt - because lenders won't chase you internationally when you default.
So if you want to refinance with someone like Sofi or Lendkey or anyone OTHER than Sallie Mae, this will get your dad's name off your account and you can default without having to worry about your parents getting hounded. I had loans with Navient and had a cosigner, and then I refinanced with Lendkey and my parents are no longer my cosigners.
However, the hard part might be finding someone willing to let you refinance, especially if you don't make a lot of money compared to your total student debt. I applied to so many lenders and they all told me I was too poor to refinance because I guess they figured I might not pay and they were too afraid to take a chance on me. Well if I could afford my payments, I wouldn't need to refinance, now would I? You can get a cosigner to refinance, but that would kind of defeat the purpose of what you're doing.
Hope this helps a little!