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We're the Consumer Financial Protection Bureau (CFPB), a U.S. government agency that makes sure banks, lenders, and other financial companies treat you fairly.

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If I co-sign for my grandchild's student loan, can the lender garnish my Social Security check if my grandchild can't or won't repay the loan?

Support from parents and grandparents can be critical to college success and there’s some confusion around this topic. Federal student loans do not require a co-signer. A parent or legal guardian can borrow a Direct PLUS loan to help a student pay for college. Generally, PLUS loans are not extended to grandparents on behalf of a grandchild.    

You may have been asked to co-sign for a private student loan for your grandchild. Private companies that offer private student loans are not allowed to garnish Social Security checks of co-signers if the borrower can’t or won’t repay the loan.  But, the lender can still pursue you and even take you to court to try to collect the amount due because you co-signed the loan. Keep in mind that these loans do not carry the same consumer protections as federal student loans.

Encourage your grandchild to explore all federal student aid options before taking out a private loan.

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