Refinancing My Student Loans Helped Me Free Up My Mom As A Co-Signer

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  • My mom co-signed $82,000 of my private and federal student loans, and it nearly ruined our relationship.
  • After eight years of paying off student loans and rebuilding my credit, I finally qualify to refinance my student loans.
  • Refinancing my student loans also means I can release my mom as a co-signer on my loans.
  • Find the student loan refinance rate that’s right for you with Credible.

In college, my mom co-signed for $82,000 of my federal and private student loans. At the time, none of us really knew what we were getting into.

My family moved to the United States from the Philippines in 2003. By the time I started college in 2010, my parents were just getting used to our newfound financial stability. My mother co-signed my student loans because she was always supportive of all my creative pursuits.

Eight years after graduation, my private student loans alone have cost me $670 a month and most of it is in interest. To be fair, I haven’t always made payments in those eight years. Only in the last year and a half, during the federal student loan payment break, have I been able to pay the minimum monthly payments.

After rebuilding my credit, I am finally eligible to refinance my private student loans, which total $64,000. While refinancing federal student loans means giving up any future ability to get federal student loan forgiveness, I refinance private loans – they will remain private and continue to be ineligible for forgiveness.

Here are three productive and healing conversations I had with my mom while weighing my options.

First I told him about the math

My mom is great at math — after all, she’s a data analyst who studied statistics in college — but I felt like I had to tackle this one on my own. I opened apps with SoFi and Laurel Road to compare my interest rates and terms to what I’m currently paying, and to calculate how much I’d pay until the loan ended.

Note that these numbers below are for me and my specific loans – different borrowers will likely get different numbers.

Learning that I could save up to $84,000 over the term of the loan through refinancing was a major red flag for me. Besides paying a lower interest rate and shortening the term of the loan, an added benefit is that I would release my mother as a co-signer.

My mother encouraged me to choose the most realistic payment plan

For the past year, my mother has been helping me pay $230 a month for my student loans so that I can pay the monthly payments.

Even though the calculations clearly show that I would save $15,000 to $20,000 over the term of the loan by choosing a shorter repayment plan, my mother encouraged me to choose the 20 year refinance with Laurel Road because it was the closest I can currently afford.

She told me to pick the most manageable monthly payment amount so I wouldn’t be intimidated. She also encouraged me to add more to the minimum payment if I had extra money each month.

I blame myself for not having this conversation with her 12 years ago when I signed my student loans, but I no longer want to judge my past decisions with today’s knowledge. It’s unfair and mean to my younger self to think that way.

We talked about what it means to remove her as a co-signer

During our conversation, my mother kept saying, “So marry pay less money. Marry get a lower interest rate. I asked him, “Why do you keep saying we?” The whole point of refinancing is that your name would no longer be on the loans.”

My mom replied, “I’m just emotionally attached to this because I know the quality of your life will be so different when those student loans go away.” When I read her the total amount we would have paid had we met our current payment terms, my mother and I agreed that the student loan system was predatory.

“If I had the money back then,” she told me, “if all of us parents had the money, we’d just send you to school. It shouldn’t have cost so expensive. It shouldn’t be so expensive to provide for your children, and that they can do what they want in life.”

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