Can Retired Grandparents Cosign College Loans?


Question: I know I will probably have to take out some loans to attend college. I have been told that I will need a “cosigner," but my parents have bad credit. My grandfather has volunteered to help, but he and my grandmother are both retired, and I don't know if he's allowed to do this. Can grandparents who are retired still cosign college loans?

First the good news: When students want to borrow money for college, lenders usually require a “cosigner" who will be responsible for the debt if the student is unable to repay it. But anyone can cosign a student loan, whether the cosigner is related to the student or not and whether the cosigner is still working or not ... as long as he or she has adequate income or assets (e.g., a home, stocks, other investments or savings) to cover the loan if the student should fail to make the required payments. So just because your grandfather no longer has an earned income doesn't mean that he can't qualify to cosign a loan. And if he has a high credit rating, this may help you to get a lower interest rate on your loan.

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