Rights and Responsibilities on Repaying and Forgiving College Loans

Rights and Responsibilities on College Loans Liability

* When parents cosign for their child’s college loans and the student does not pay them, parents are liable for the payments. When the child makes intermittent payments, the parents’ credit score is adversely affected.
* Lenders in the past were generous in giving out money for college loans. Individuals have been known to use college loans to make car payments, mortgage payments or to finance outings such as Spring Break trips. College loans are still owed regardless of how the money was used, even if the property or assets purchased with that money are no longer in your possession.
* College loans are still owed regardless of whether or not you completed your degree or were able to get a job in your field.

Rights and Responsibilities on College Loan Forgiveness

* When the borrower dies and there was no cosigner, the college loans they took out as a single person are extinguished. If you live in a community property state, college loans taken out by one spouse while married may remain the responsibility of the surviving spouse.
* Federally insured student loans cannot be discharged in bankruptcy. Only near or total disability can result in forgiveness of federally backed student loans. Private college loans are rarely discharged in bankruptcy but can be negotiated into longer payment terms.
* There are programs such as Public Service Loan Forgiveness that allow those working in qualifying jobs to have their debt forgiven after 120 months of payments. All local, state and federal government jobs are part of the Public Service Loan Forgiveness. Policemen, firemen and military service members also qualify for the Public Service Loan Forgiveness. However, it is the responsibility of the debtor to enroll in the program. You do not get public service loan forgiveness unless you enroll. Then you must make all payments on time and in full. Skipping payments can result in discharge from the debt forgiveness program.
Public librarians and social workers in the public sector are eligible for this program. Teachers in federally designated high-need areas are also allowed to participate in the Public Service Loan Forgiveness program. However, if you change jobs to an employer not covered by the Public Service Loan Forgiveness program or the private sector, you’re left paying the college loans at their original terms. What if you work 10 years in the program? Once you reach the 120th payment, it is your obligation to file for debt forgiveness.