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Can I undo co-signing my daughter's student loans?

September 21, 2012: 6:30 AM ET

My youngest daughter graduated from college this spring. She has loans (Direct Plus and FFEL), which I co-signed for. I am afraid her lack of income and ability to manage her money could cause her to be late or completely miss payments. Is there a way to get these loans in her name—and get me out of the picture? — Steve F.

The short answer is no. "A Direct Plus loan is a loan made to the parents, not the student, so it cannot be transferred," says Karen Carlson, Director of Education at InCharge Debt Solutions, a nonprofit credit counseling service based in Orlando, Fla. As for the Federal Family Education Loan (FFEL), Carlson says there is no way for the parent to be released from their debt obligation as co-signer.

If your daughter is having trouble making payments on time, Carlson recommends sitting down and making a plan to mutually tackle the debt. Figure out what you can afford, and work out a payment budget for the loans. Call the loan servicer to find out what your best options for repayment may be. For instance, if money is tight, you may consider spreading the loan payments over a longer period of time. (Some repayment agreements allow borrowers to stretch payments over 25 years.) "You'll end up paying more in the long run, but if that is all you can afford, it's a good option," she says.

The Federal Student Aid website provides an overview of repayment plan options for Direct Loans and FFEL Program loans at http://studentaid.ed.gov/repay-loans/understand/plans.

— Austin Kilham

Got a question for the Help Desk? Send it to helpdesk@cnnmoney.com.

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