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. There’s some confusion around the types of student loans available to family members.

Only federal student loans can result in garnishment, or offset, of Social Security benefits. Federal student loans do not require a co-signer. A biological or adoptive parent (or in some cases, a stepparent) can borrow a Direct PLUS loan to help a child pay for college. Grandparents must formally adopt grandchildren to be eligible to apply for PLUS loans.

You may have been asked to co-sign 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.