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"Ms. DeOliveira-Longinetti, who co-signed on the loans, was shocked and confused." Be careful when co-signing any loan.
by pkaye 10y ago
"Ms. DeOliveira-Longinetti, who co-signed on the loans, was shocked and confused." Be careful when co-signing any loan.
- rayiner 10y agoThe article calls this abusive loan-sharking at the behest of the state's evil Goldman Sachs overlords. But the woman co-signed her son's loan. What did she think that meant?
- endianswap 10y agoYeah it's pretty straightforward to pair a loan like this with life insurance (which is not only cheap for someone of college age but also generally requires no medical exam).
- josephlord 10y agoThen it would also be pretty cheap for the lender to insure against borrower's death or to bear the low (amortised) cost. There is no reason a guarantor couldn't be responsible only for wilful failure to pay but not for after death. I'm not saying these things apply in the agreement under discussion or under the relevant laws but just that different structures are possible.
- ars 10y ago> Then it would also be pretty cheap for the lender to insure against borrower's death It would. It would be so cheap for them that they might as well just cut out the middleman and self insure. AKA just forgive the debt and that's all. Which apparently everyone else does, except NJ.
- pkaye 10y agoThat is a good idea. For someone that age, it would be quite cheap and probably could get rolled in with auto insurance for more savings. A $50K policy would cover the average college debt.
- kafkaesq 10y agoThe article calls this abusive loan-sharking at the behest of the state's evil Goldman Sachs overlords. It says no such thing -- either in regard to evil generally, or to Goldman Sachs. The article mentions GS, but only in passing reference to one of the people it interviewed who happened to have worked there, but got laid off.
- themartorana 10y agoYeah that was silly. This is still relevant, though: "Most significant, New Jersey’s loans come with a cudgel that even the most predatory for-profit players cannot wield: the power of the state. New Jersey can garnish wages, rescind state income tax refunds, revoke professional licenses, even take away lottery winnings — all without having to get court approval."
- pkaye 10y agoWhat happens if they move to a different state?
- themartorana 10y agoThat's actually a great question...
- jbooth 10y agoStudent loans aren't dischargable in most forms of bankruptcy, why's a cosign necessary?
- lj3 10y agoFor precisely that reason. Loans aren't dischargeable via bankruptcy, but the lenders still want their money if the primary loan holder can't or won't pay. It's some insurance that they'll get their money back, especially when lending to people with no credit (like 18 year old college students).
- tomp 10y agoYou mean, "Don't co-sign any loan"? You might as well get a loan yourself, then sub-loan to the person you wanted to co-sign with...
- pkaye 10y agoYup, and the risks are lower without a co-sign because if that person passes away, the other person is not liable.