Should I Co-Sign a Student Loan For My Children?
Should Christian parents co-sign loans for their children to go to school? The quick answer if you want the Bible's perspective is..no! Co-signing a loan for your children to go to school may seem noble, but the bible speaks strictly against it. There are "no credit" loans and also "no-cosigner" student loans that your children can take out if they don't have the credit history established to qualify for a personal loan. However, the Bible teaches strictly against you co-signing a loan for your children. As mean as that may sound, there is some sound principle to it. Just as the many parents who have co-signed loans for their children to go to school only to be stuck with huge payments if their children default.
According to the book of Proverbs 22:26-27: The Bible tells you to shun cosigning on any loan with these words, "Do not be a man who strikes hands in pledge or puts up security for debts; if you lack the means to pay, your very bed will be snatched from under you." So if you are a strict Christian who want to do things as the Bible instruct, then directing your child to a "bad credit" personal loan, a "no credit" personal loan or a "no-cosigner" student loan may be the best option if they need more money after getting financial aid or if they don't qualify for financial aid.
If they don't want to get a "bad credit" personal loan, a "no credit student loan" or even a "no-cosigner" student loan, then they may have to consider delaying college at bit while they work to save money to go to school.
Should I Feel Guilty For Not Co-Signing My Child's Student Loan?
No you shouldn't. In essence, you job as a parent is to get them safely into adulthood. Higher education is something that parents may save for if they can afford it, but if they cannot afford it, then should not put themselves into further debt by taking out PLUS loans or co-signing loans for their children. Many parents can tell you the horror stories of doing this for children who quit school or go to school and slack off, wasting their hard earned money or ruining their credit. If you have saved money for your child to go to college, then great! They are lucky. However, it is not your responsibility to fund your child's college education. After highschool, or after the age of 18, the are on their own. You have done your job bringing them safely into adulthood. If they want to go to college, and you can't afford to fund it with savings, then they should work while going to school, delay school or take out a student loan in their own name and using their own credit without asking you to co-sign for them.
Ultimately, the choice is yours-but the Bible warns you against it. Let them take out a no-cosigner student loan on their own. While they are waiting for their no cosigner student loan application, they can try to appeal for money through their schools financial aid office. If you are still tormented by your decision not to co sign a student loan or personal loan for your child, just read the Bible and take solace in your decision.
You have it as your faith for a reason, it is to guide you at times when you need to make touch decisions. Even tough financial decisions about your children. Sit down with your child, take out the Bible and explain to him or her why you won't be co signing his or her student loan. Offer to have them stay home to help ease their financial burden while they are in school. However, they are now adults and financing their education is now their responsibility. You did your job, you raised them well.
Let them know there are options such as asking for more financial aid, taking out a no credit student loan or taking out a no cosigner student loan. Perhaps if these are no appealing to them, they could delay college a year or two and work to pay for their education. Perhaps they could attend a 2 year state program or training program so they could start working and making enough money, then go back to night school or even finish their education online while working their professional jobs. There are so many options today, that there is no reason for you to feel guilty for not wanting to co-sign a student loan for your kids.
A great blog for parents to read is Gal-Vas-Oxlade's blog where she talks about why you should not co-sign a loan for anyone, including your children. For those who don't know who Gail Vas Oxlade is, she hosts a program on CNBC called "Til Debt Do Us Part" where she helps couples get out of financial debt. Her program usually comes on right after Suse Orman's show, who is another CNBC financial guru.