Cosigning can put relatives’ benefits at risk, Legal Aid attorney warns
Hamill warns that cosigning student loans can expose the cosigner to collection and, in some cases, garnishment of federal benefits such as Social Security if the borrower defaults and the cosigner is sued.
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Zach Hamill described cosigning as one of the scariest scenarios he sees: if a grandparent cosigns a student loan and the borrower defaults, the lender or loan servicer can pursue the cosigner. "Grandma only gets Social Security...All of a sudden, grandma's Social Security is being garnished by the federal government to pay back those student loans," Hamill said.
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