Tempted to Co-Sign a Student Loan? Offer these Options Instead

Keeping the money on the table--alternatives to co-signingI’m always unsure how to respond when my daughter calls or texts me. Sometimes she vents about her work, her boyfriend, or her daughter. Sometimes it’s about the unfairness of life. Often times, it’s about money—and if I can “lend” her a couple hundred. The most recent call was to ask if I would co-sign on a student loan.

Following my shocked silence, she continued to tug my heartstrings about her limited budget, costs of school supplies, clothing, and day care. For additional oomph she added, “and I’m not scheduled enough hours this week” into her plight. It’s no good to toss in my own anorexic budget because it falls on deaf ears. Besides, I want to help!

However, it just isn’t possible. According to a 2014 study by the United States Government Accountability Office, nearly 40% of federal student loan debt belongs to those over 65, whether their own debt or that of an adult child. Adding to the complications are our own struggles with eliminating debt, lowered income, caregiving costs, and perhaps that same adult child living at home.

So how can we avoid additional debt and/or risk while becoming the hero? Consider one or a combination of these ideas:

Co Sign Alternatives: Big Help. Low Risk.

Buy books: text books are a huge expense for college students.  Offer to cover these costs and take on the hassle of ordering, renting, shipping, and more. There are several text book rental sites available offering significant discounts.

Pay for a tutor: once your adult child has plunked down hundreds of dollars for a single course, it’s critical she passes! If your student starts to express concerns, suggest a tutor immediately and offer to pay. You don’t want your child to have to pay—or repeat—any class, especially with today’s tuition costs.

Offer to tutor: some coursework is basic (intro to math, English, science, history, etc,) so if your student needs help, offer to tutor. This can be done in person (if local to your child and her school), or virtually. Either option saves time, money, and highlights you as the lifesaver.

Become a student’s helper: offer to care for grandchildren in the evening, clean house, fix meals, handle sick children, walk the dog, and so forth. Offer the stressed student time off and gift your child with a gift certificate for a dinner and movie. Maybe offer a birthday gift certificate to a baseball game, a massage, or something special.

If you live out of town: many of the ideas and services above can be handled long-distance. If you are unable to help locally, search online for mother’s helpers, dog walkers, house keepers, and other needed tasks. These services are available at a reasonable fee and offer a win-win for you, your adult child, and the business owner.

An added bonus: with entrepreneurialism a hot activity for Boomers and GenXers, you can offer similar services to out of state students.

We love and want to help our children through their life journey, but co-signing loans adds an element of debt and risk few want to encounter. Implement these tips to help your adult child avoid deep debt with these ideas and be the lifesaver!

Kristen Edens
Making Midlife Better

Adventures in outsourcing: Accountant

Accounting NoteI have a confession: I flunked accounting. I was a sophomore at Bowling Green State University and rather eager to study accounting. I was fairly decent with math and had an interest to understand money flow and finances. Somewhere along the way, I took a nose dive. I couldn’t grasp the accounting concepts and fell behind. I was devastated; this was a required course and I disliked wasting my time. I had to repeat the course, hire a tutor, and squeaked by with a D.

Nevertheless, I still maintained the family finances, budget and taxes without trouble, but wasted no time seeking out an accountant for Kris the Scribbler.

My dad would have cringed. His mantra was, “Never trust anyone with your money, especially related to taxes.” For most of my life, I maintained a death grip on his belief for personal taxes, yet released it when it came to the complexities of business taxes. There were too many intricacies for my comfort:

  • tax status
  • investments
  • social security requirements
  • medical and health insurance
  • business expenses
  • profits and losses
  • quarterly payments
  • constantly changing tax laws

I already was irritable and impatient when it came to learning new software so programs like Quicken or Turbo Tax would have stalled me further. No…I needed an accountant! I reached out to Terri Hancock of Collins-Hancock Accounting and Tax Services, Inc. before I even registered with the state.

It wasn’t until his death in 2015 that I discovered dad had hired an accountant for his glassblowing business. I learned a lesson: dad may have had that strong personal finance mantra, but when it came to business, he took a different approach. I didn’t know it until I also became a business owner.

Since my work with Terri, I’ve avoided headaches and stress regarding all my tax issues. For instance,

  • Terri eased my budgeting concerns when I was contemplating hiring a virtual assistant
  • When 2015 tax forms were delayed, Terri informed me that my county was granted an extension for quarterlies and yearly filing following the severe floodingin December 2015.
  • I earned two tax credits based on my business activity
  • She reviews my business growth twice yearly and offers financial suggestions based on quarterly and yearly activity

These are all things that I otherwise wouldn’t know about if I attempted to manage my own taxes.

What are your outsourcing fears? What was the first task you outsourced? I’ll be sharing more of my outsourcing adventures throughout the year so watch for more. Please share with others who are ready for an adventure in outsourcing!

Thanks to John Beidle of Tax Planning StL for additional information for small business outsourcing.

Kristen Edens
Kris the Scribbler
A grandparent in business: making midlife better!