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Parents cosigned Student Loans for Sister who won't pay!

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Hi,
I am hoping that someone can point me in the right direction with this...
My parents co-signed my sisters student loans when she was in college with the verbal agreement that she would pay them back when she graduated. She was paying them just fine for a few years and then the student loans went up (a graduated plan). When they went up she claimed that she couldn't afford them, but really she just didn't to pay them because she would rather spend the money else where. I know this because my Mother went over a budget with her to be sure she could pay them.
She is now over 80 days late. She is ruining my Father's credit. He owns his own business, and doesn't make a ton of money. They are constantly asking her to just pay her bills, and she won't.
What can they do if anything? I understand there is something called Co-Signer Release? It's my understanding that if they pay for 24 consecutive months that they could apply for this, but do they need to prove at that time that my sister can pay for the loans? And since she is the primary loan holder does she need to apply for the release? Because I fear if that's the case she won't. This is tearing my family apart...if you have any suggestions we would welcome them!




If the cosignor release was written into the contract, the lates have already voided the release.


Graduated plan...is this private loan or is this a PLUS loan???


Sounds like a truly selfish child. She needs to step up and get a second job if that is what it calls for.


Sub: #1 posted on Fri, 04/05/2013 - 16:20

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