Bella Logan likes having her daughter at home with her and sharing morning cups of coffee. She isn't angry at her daughter for the student-loan mess. And she has no regrets about co-signing, even as debt collectors demand a combined $2,100 monthly payment from Logan and her daughter. That's only a few hundred dollars less than what Logan has to live on each month from her husband's pension and Social Security benefits.
The women are willing to pay something each month, but the collectors won't accept less than the full $2,100 monthly payment, so neither mother nor daughter is paying on the debt.
"I hope the people in power figure out a way to give people a chance at college and a better life," Logan said. "I don't want other generations of people to go through this."
Gambling on their kids
Robert Austin paid his own way through Boston College by working nights. He served in the Korean War. And he worshipped former Ohio State University football coach Woody Hayes' desire to run over the other team.
He is used to doing things the hard way. He prefers it.
But the government's garnisheeing of about 15 percent of his Social Security benefits to pay off student loans is one difficulty the 83-year-old never thought he would face. Austin helped his two sons attend Ohio's Miami University and Ohio State, among other schools. He isn't sure how much they borrowed in his name or how much he has paid over the years.
"I paid on student loans while living in a retirement home; that's a combination you don't hear of every day, right?" said Austin, who lived in Columbus for 25 years and now lives in Billerica, Mass. "I did the right thing by helping my boys, but it did ruin my credit rating. I'm 83, though; it's not like I am going to buy a house."
Parents and grandparents such as Austin who co-sign on private loans or assume federal-loan debt on behalf of their children often don't consider what might happen to their financial lives if they or their kids default. Most believe their children will earn enough after graduation to pay off their loans without help. Some even forget the loans or are unaware that they agreed to co-sign.
And complaints with the Ohio attorney general's office show that some parents or grandparents fear their kids might have victimized them.
That was the case for Ray Stockman, a retired truck driver from Kent. He received a call in 2008 from his son saying that he needed him as a "reference" to apply for a technical college.
About 21/2 years later, after his son had earned his degree but couldn't find a job, Stockman started receiving notices saying that he owed on loans of $9,000 and $2,500.
"I never signed a thing, nor did I agree to be a co-signer," said Stockman, 78. "I think I paid the smaller loan off, but the bigger one is still hanging out there."
The harassing calls from collectors and the loan bills stopped after Stockman filed police reports and proved by hiring handwriting experts that he never signed the loan forms.
His son has never admitted to signing his dad's name, and no charge has been filed. The defaulted loans have virtually destroyed Stockman's credit. After his wife's death last year, he was rejected when trying to lease three apartments.
"My credit being ruined hurt the most," he said. "I took great pride in that, and now, in retirement, all my hard work is tarnished."
Since Damita Hoblit agreed in the spring to borrow $10,000 so daughter Shelby could continue studying health sciences at Ohio State, Hoblit has faithfully made the payments.
In fact, she and her husband, Dan, pay an extra $70 or so each month in hopes of paying off the parent loan sooner.
But what she sees on her monthly statements confuses her: Her balance is not shrinking, but growing.
"When we ask the government how our total could be higher now, we get no answers," said Mrs. Hoblit, 45, who lives in Covington in western Ohio's Miami County. "I would never let the loan go into default, but I can see how easily that could happen for some people."
The Hoblits and others who want to ease the financial pressure of paying for college for their children often are unaware of all their loans' details.
They often take the advice of university officials who suggest the direct parent loans, and they are unaware that those loans come with a standard 7.9 percent interest rate that can't be refinanced. They take out loans that are readily available without fully understanding the possible long-term impact.
The Hoblits, like millions of other families, are doing what they can to ensure that the loans don't go into default.
They pay about $400 a month for two parent loans totaling about $27,000 for Shelby, 21, and their daughter Ashley, 23, who graduated from OSU in August with a degree in biology.
They have no regrets about helping their daughters, but they warn other parents and grandparents to read the fine print and ask plenty of questions before borrowing.
"I am not blaming anyone else, but it's confusing," Mrs. Hoblit said. "The girls needed the money to get their degrees, but I would have never borrowed these kinds of loans if I had known it would be like this."
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