Should I co-sign my grandchild’s college loan?

Originally published in the News Star and the Shreveport Times on Sunday, January 15, 2017.

Q: My granddaughter has been through a lot. Her parents divorced and she has struggled in school. She wants to go to college, but neither parent has enough money to send her. She can get a loan to go to college, but she says I will have to co-sign for her to get it. It won’t cost me anything to co-sign so I don’t see what the harm is. What do you think?

A: I think you need to ask a lot more questions. Or you might get an education you didn’t count on.

grandchild’s college loanIt’s time to ask your granddaughter some questions. And then, before you sign anything, you need to ask yourself some questions.

“Why do you want to go to college?” would be my first question to ask your granddaughter. If she looks at you very quizzically, as if you’d asked her, “Why do you want to turn 18?” you can be pretty sure she doesn’t have a good answer.

Remember that high school kids are great at answering essay questions about which they know absolutely nothing. It’s an art learned by every high schooler who wants to do anything but study.

If her answer is broad, general, vague and very noble sounding, she has no idea. “I want to work with people and…help people. And maybe end world hunger.”

Not an answer.

But that’s OK. Most college freshmen don’t know what they want to do with their lives, which is why you ask question number two: “What are you willing to do to make a contribution to your college education?”

“Go to class and study really, really hard, Grandma,” is also not an answer. This is a given. Going to class and studying are not contributions – they are privileges someone is paying for. And it just so happens she wants you to pay for her to have these privileges.

Now it’s time for the reality check question. “May I see a copy of your high school transcript?” With a few notable exceptions (and yes your granddaughter may be that exception), very few students do better in college than they did in high school. Many do far worse. Let’s just say there are a few more distractions in college than there were in high school.

Over 40% of all students who have borrowed money from the government’s main student-loan program are not making payments or are behind in their payments, according to the Education Department.

And when parents or grandparents of those students have co-signed the loans on which their progeny have defaulted, they are left to pay the loan back.

So finally, here is a question for you: do you want to help your granddaughter get a college degree or do you want to help you daughter earn a college degree? There will be a massive difference in your granddaughter depending on which path she takes.

You have said your granddaughter has had a tough time of things. I am genuinely sorry to hear this. Unfortunately, this is all too true for many young people.

But please don’t make the mistake of “rescuing” her from all hard things. Life has “bad hard things” and life has “good hard things.”

Taking a year off to work, earn and save money would be both unusual and hard for your granddaughter. Working part time while she goes to school part time would also be hard. Going to a less expensive community college to take basic courses, while her friends go off to more glamorous campuses, would be hard. And realizing that it may be time to stand on your own two feet before your peers have to do the same would be a hard thing.

“Bad hard things” crush us because they extinguish any hope for a better future. “Good hard things” strengthen us and show us that there is a hopeful future out there, and that hopeful future can be attained through our own focused effort (aka, hard work).

I can’t say what your final answer should be. In most situations like yours, I would advise against co-signing. But whatever you do, make sure you help your granddaughter get the best education possible.

Let her earn it.

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