Dear Penny: Can I Make My Daughter Pay the $350/Month Student Loan I Signed?

Dear M.,

Since your daughter is living at home, you have some leverage. Getting her own place would cost her a lot more than she’s paying to live with you. She may not even be able to find a landlord who’s willing to rent to her without a co-signer.

I’d require your daughter to set up automatic transfers to your bank account to cover the student loan payments each month as a condition of living with you. Don’t just settle for the minimum payments, though. If you’re paying $350 monthly on an $18,000 loan, you probably have another five years or so worth of payments remaining.

A lot can change in five years. Maybe your daughter will grow up a bit and take responsibility for the debt she acquired. But it’s also possible that she’ll use the money she’s earning to move out, while leaving you stuck with the loans. I’d aim to get as much of that balance paid off while she’s still living with you. Once your daughter is out of your home, it will be a lot harder to collect that money from her.

You may have additional bargaining chips. For example, if she has a car that you financed, you could tell her that you’re selling it and putting it toward the student debt if she doesn’t take over loan payments.

You don’t say whether this was a loan you co-signed for your daughter or if you took out the loan in your name only. If you co-signed the loan, remind your daughter that she’s legally responsible for payments. Unfortunately, this distinction doesn’t matter much for practical purposes, though. Even if both of your names are on the loan, a lender is a lot more likely to go after you since a 19-year-old typically doesn’t have any assets to go after.

You might also want to talk to your lender if you’re struggling to make payments. Since this is probably a private loan (federal loans seldom require a co-signer), you’ll be at the mercy of your lender. But if you can document that you’re experiencing hardship, they may be willing to modify your payment. Sometimes lenders will agree to reduced payments because it’s better than the alternative of letting the account go to collections.

I’m guessing you and your daughter have argued a lot over these loans. If I’m correct, keep the focus on getting your daughter to start paying up. Don’t make it about the disappointment you may feel over her decision to drop out. That argument won’t get you anywhere and will only result in frustration for both of you. But do remind her that you’re living on disability and that the debt you took on for her is causing you financial strain.

If your daughter refuses to make payments, be prepared to take action. You could give her a written notice telling her she has 30 days to make payments or move out. But then you need to follow through and actually kick her out if she refuses to pay.

Kicking a child out is often enormously painful for parents. Consequences force us to grow up, though. Your daughter may have chosen to drop out of college, but she doesn’t get a pass on the school of life.

Robin Hartill is a certified financial planner and a senior writer at The Penny Hoarder. Send your tricky money questions to [email protected].