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Should I Co-Sign A Student Loan For My Kid?



Question: My daughter graduated last month with her bachelor’s degree and now heads to grad school so she can become a forensic accountant. She’ll make good money, she tells me, but she has none right now — she already has more than $20,000 in student loans and needs another 20. 

She wants me to co-sign for a private student loan because she can’t get one at a decent interest rate on her own. She promises she’ll pay me back, but even some quick Internet searching shows that I’m on the hook for the entire amount — which would break me.

One last thing to know: My daughter has a job offer for a minor position right now, and in 2-3 years, she’d save up enough to pay for most of her grad school. But she says she’ll be costing herself some high-earning years. Plus, she’ll have to start paying back her student loans, which will just wipe out her savings. 

What should I do? 

— Paul in Deleware

Howard Dvorkin CPA answers…

A few months ago, a reader asked me about co-signing for a car loan. My answer to him is the same as my answer to you…

It’s a financial decision that could prove costly.

How costly? Here’s some new information I didn’t have back in March: “38 percent of co-signers had to pay some or all of the bill because the primary borrower did not.” That’s from a new study conducted by

While most co-signings are auto loans (51 percent), a good portion are student loans (19 percent). So you’re not alone in your quandary, Paul.

Still, I maintain you should not co-sign your daughter’s loan. Here’s a good reason from that same study: “26 percent of co-signers said the experience damaged their relationship with the person they co-signed for.”

Instead, I urge your daughter to take that job, save money, and return to graduate school later. What about those student loans she has now? She can ease the burden by enrolling in a government program that can slash her monthly payments. She can read about that in’s Student Loan section, or if she prefers, she can simply call a counselor at  for a free consultation.

Even if you decide to indeed co-sign your daughter’s loan, I hope you’ll call us for a consultation first, Mark.

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