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My husband co-signed a private student loan for a friend while still in college. The former friend has now defaulted on the loan after never making a payment and deferment status running out. The former friend actually never paid school bills with the loan and instead used it for a new car, electronics, and cloths. Can anything be done since the loan was taken out for school and never used on school expenses?

What the student does with the money after educational costs are paid is their business so it would not be fraud. Transportation is included in a student loan budget although no loan will pay for a new car. Your husband should have made sure that the student really needed the money before signing for the loan. He took on the responsiblity for the loan by becoming the cosigner. He needs to understand that they BOTH will be sued so he may want to get that message to the borrower. Private loans do actively sue, garnish wages and levy bank accounts.

Sub: #1 posted on Thu, 10/18/2012 - 05:59

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