01/14/2014 01:34 pm ET Updated Mar 16, 2014

Nasty Niece Leaves Aunt Hanging on Sallie Mae Student Loans

Huffington Post Reader Question

Dear Steve,

My wife cosigned on several Sallie Mae loans for her niece. Her neice stopped repaying her loans several years ago and my wife has been paying the interest only since then, which Sallie Mae approved per a phone conversation. They never sent a paper confirmation of the agreement, now they claim she should start paying off principal.

When she cosigned she was working full time, she is now retired and no longer has the income she had when she was working, living off a small pension and social security. She was paying about $150. a month, now Sallie Mae wants her to pay about $750 a month. We are not on speaking terms with the niece (her choice). We were told by some relatives that she is working. So hopefully she is capable of making payments.

Can my wife some how force her niece to make the payments? Is there a way to get Sallie Mae to accept the agreement they made several years ago to accept interest only? Is there a way to get Sallie Mae to go after the niece?


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Dear Eileen,

So here is the big problem here. When your wife cosigned for the nasty niece she accepted full responsibility to repay the loans if the niece could or did not. Cosigning is a trap. Always has been. Always will be.

Sallie Mae has no forced long term options like a federal loan does. But the first thing to check is if the loan being serviced by Sallie Mae have a federal component to them. If so then better options are available to address the issue. Click here for details on how to do that.

If the loans are truly private loans then there are three basic options. The first is to attempt to negotiate a suitable repayment agreement with the servicer. Second, you can always default on the loans and take your chance they may then offer a better plan and hopefully not sue you. The final option would be to consider bankruptcy to discharge any other debt you may have and hold the lender at bay. Click here to find a bankruptcy attorney for free.

The truth is the moment the cosigning happened, that's when the boat started to sink. Sallie Mae is under no obligation to offer either an interest only permanent plan or go after the niece. That's why they wanted a cosigner to go after from the start.


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