A reader wants to know how to stop being financially responsible for someone else's debt.

Question: How do I end being a co-signer on a student loan?

— Sonia in California

Howard Dvorkin CPA answers…

As I’ve often said, the shorter the question I’m asked, the longer the reply I need to give. In this case, the answer is longer because I don’t know the details of your situation.

First, I’m assuming this is a private student loan, as opposed to a federal one. There’s really only one federal loan you can co-sign for, called Direct Plus. Since that’s not a common loan, let’s focus on private student loans.

What’s the difference? Private student loans are those you get from a bank, credit union, or other non-governmental lender. Because these are private businesses, they can set any interest rate, loan limit, and other terms they choose.

Among those terms: How co-signing for the loan will work out.

As you’ve discovered, Sonia, “co-signing” sounds much more innocuous than it is. You’ve essentially committed to paying off this loan if the person who took it out fail to do so. The lender doesn’t really care if you have the money, or if it’s a hardship to pick up those payments. You’ve signed a legally binding contract.

Five years ago, the Consumer Financial Protection Bureau reported, “more than 90 percent of new private student loans are co-signed, often by a parent or grandparent.” Since then, student loan debt has topped $1 trillion. So I imagine that figure has increased.

The bottom line is, if the lender doesn’t want to let you off the hook, it doesn’t have to — but it doesn’t hurt to ask. If the loan you co-signed came from Sallie Mae, a popular provider, there’s actually a process for that. However, the borrower has to ask for you to be released. You can’t do it alone.

If you’re in dire financial straits, and paying off someone else’s loan is pushing you toward bankruptcy, then it gets even worse: Bankruptcy doesn’t automatically relieve you of student loan obligations. That gets complicated because bankruptcy rules vary by state, but Debt.com has a report called What If You Cosigned a Borrower in Bankruptcy?

If after reading that you still have questions, call Debt.com at (855) 996-9526 and ask for a free debt analysis. Because you didn’t provide other details, there may be options you don’t know about. For instance, if the borrower agrees to get you off the loan, it might be easiest to simply refinance or consolidate into a brand-new loan.

For those reading this who are thinking about being a co-signer on a student loan, I hope this gives you pause. If you’re a parent, relative, or friend trying to help a young person graduate from college, there are other options. Please explore them first.

Have a debt question?

Email your question to editor@debt.com and Howard Dvorkin will review it. Dvorkin is a CPA, chairman of Debt.com, and author of two personal finance books, Credit Hell: How to Dig Yourself Out of Debt and Power Up: Taking Charge of Your Financial Destiny.

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Ask the Expert, loans, parents, student loans

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Article last modified on June 27, 2017. Published by Debt.com, LLC .