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 Dear
Debt Adviser,
My son is in college and has incurred more than $20,000 in credit card debt with various cards. He has no income and no way to pay them off. He doesn't have any student loans. Can you get student loans to pay off credit card debt? And if so, would he be required to have a co-signer? He wants to avoid bankruptcy. Are there any other options?
-- Sheryl
 Dear
Sheryl,
Something about your letter bothers me right away. You are writing, but your son -- the one with all the credit card debt -- is not. From your letter, it is clear that you want to do something about this debt. But does he?
From my experience as a credit counselor and a parent, any plan to address your son's debt will need to start with him. First thing I would suggest he do is remedy the no-income situation and get a job. Shocking advice, I know. But if he doesn't connect spending to working, he will learn all the wrong lessons at college.
If he is resourceful enough to establish credit and end up $20,000 in debt, he should have no problems securing at least part-time employment to help pay off the debt.
Once he has a job, I suggest he craft a budget. In the budget, he needs to include all the items he was previously placing on his credit cards. In addition, he needs to set aside an amount sufficient to pay off the $20,000 in debt in as short a time period as possible.
If you can and want to assist with the budgeting step, that is great. But let him take responsibility for most of the work. Let him go online and find the necessary tools and do the required legwork to get the process started. I suggest he try Bankrate's Financial Literacy series on budgeting for some tips and work sheets.
Two goals are always better than one. I suggest that instead of trying to save him from himself, you work together toward a pair of objectives during this process. First, encourage your son to pay off the debt. Second, educate him on how to avoid debt problems in the future.
The most effective financial lessons require being intimately involved in arriving at and implementing the solution to the problem. That's especially true for someone who is your son's age.
As to your question about student loans, you could probably pay off credit card debt with a student loan, but it may cause you problems, especially if it is a subsidized loan.
Most public loan contracts specify that the loan is to be used for "educational purposes." You can use the money for room and board, a computer and other similar items, but I don't believe credit card debt would qualify as "educational." That would place you in violation of the contract. If the lender found you, you could be required to pay the loan in full. Once again, this is the wrong lesson to learn.
With your son's credit history, he would most likely need a co-signer for any other type of loan. I don't recommend you co-sign for him.
I agree that your son should avoid bankruptcy, if possible. And I see nothing here that warrants a legal solution to his spending problem. It would make his bad credit history that much worse, teach him exactly the wrong thing about handling his finances and seriously complicate his job searches for up to 10 years after he graduates.
I know how much mothers worry about sons, but I encourage you to toss the problem back to him. Offer support that will help him develop some steel for his backbone. This may be one of those character-forming experiences that will serve him well for the rest of his life.
Good luck!
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