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I graduated in 2017 with a bunch of student debt that my parents held on my behalf (~$130k). My sibling went to the same university as me and my parents also took out debt to fund her education. However, the only needed to take out half as much ($65K) because the school gave more financial aid. The reason why my parents received more financial aid was strictly because their financial situation had deteriorated (partly because of the loan they took out for me). My sibling and I got the same degree.

My sibling (2 years younger) and I are now paying each of our loans off respectively, but it struck me recently that this might be unfair. By virtue of my sibling being 2 years younger, they'll pay half as much for their education as me despite having the same education and family.

I pitched that we should pool our debt and pay it off together. Of course, because my sibling is two years younger, there'd be some structuring to do here so that it'd be fair, but this ended poorly. My sibling felt betrayed that I would ask for that and thought I was trying to scam them. Obviously, this solution benefits me at their expense but I genuinely believe it's the fairest thing to do and I would do it if the situation was reversed.

Before considering more drastic options, I wanted to get this community's thoughts:

  • Am I wrong to be thinking this way? If so, please help me understand.
  • If I'm not wrong, how can I convince my sibling that this is the fairest outcome?

I'm mindful that this isn't a purely financial topic, so definitely let me know if there's a better forum for this. Thank you.

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    I think to answer this I'd need to know why your sibling qualified for more financial aid. If it was purely because of the debt your parents had already taken on, then I might agree with you, but if it was for any other reason - the subject(s) that they studied were eligible for different grants, or they were part of a program to get more people of their gender to study a particular subject, or even just the rules of eligibility changed in the two years between you - then I don't think it's fair to ask to pool the debt. – Vicky Nov 8 '20 at 17:45
  • Thanks @Vicky! I added those details to the question. The reason why they qualified for more aid was purely because my parent's financial situation deteriorated (partly because of my loan). We had effectively the same university experience (same degree, activities, housing, etc), just two years apart. – smartButNotSavvy Nov 8 '20 at 17:52
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    Are they loans in your name, or are they loans in your parent's name? – mhoran_psprep Nov 8 '20 at 17:53
  • My loan is technically still in my parent’s name because we refinanced it by putting it in a second mortgage. See more here: money.stackexchange.com/posts/comments/211864?noredirect=1. I’m a cosigner on my sibling’s actual student loan because I had better credit than them + a stronger income than parents, so I helped them get better terms when they refinanced. – smartButNotSavvy Nov 8 '20 at 18:22
  • And more questions: are you and your sibling living and sharing general expenses with your parents now? Do either of you have a spouse or other dependents? – Vicky Nov 8 '20 at 18:24
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In general your student loans and your sibling student loans are two separate things. You knew full well the cost and conditions of your education when you signed on the dotted line. Whether your sibiling got better terms or not, isn't particularly relevant.

Example: let's say you buy a car and then two years later your sibling buys the same car two years later but due to a massive sales event, they get it for $5000 less. Would you expect them to give you $2500 just because you paid more ? It's not "fair" but that's life.

However, there seems to be some entanglement between your two loans, that I don't fully understand. If your parents are subsidizing some of part of it, it's up to your parents how much they want to subsidize each child. You also appear to be a co-signed of your siblings loan, but it's unclear what exactly that means.

Overall you want to have these discussions BEFORE you make a decision. In essence you have created a contract and you currently want to re-negotiate this in hind-sight. That's guaranteed to ruffle feathers. For example: your sibling can claim "I would have never went to this college if I knew it was that expensive".

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  • +1 for your last paragraph in particular. Given this question and the previous one (linked in comments on the question) it seems there is somewhat of a tendency here to make complex financial decisions without necessarily understanding all the implications / ramifications. I would really recommend that if you want to change anything about the current arrangement, you get some independent financial advice first. – Vicky Nov 8 '20 at 20:23
  • Yeah, this is a fair interpretation given the details I've shared. I think there are some potentially relevant points I left out like the fact that our parents didn't tell either of us that we would be responsible for the loans (or that there were any loans). I agree with the sentiment that it should've been up to my parents to divvy this up appropriately. I don't think they thought about this nor did I when I accepted these "terms". – smartButNotSavvy Nov 8 '20 at 22:01
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    So you didn’t know there even was a loan, but you still were a co-signer on it? Something doesn’t quite add up here.... – Vicky Nov 9 '20 at 0:07
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    @smartButNotSavvy: Sorry to be blunt here, but I think you made some bad financial decisions and how you have to live with the consequences. In the US there is mandatory entrance councelling before you can take out a student loan. Di you not do that ? – Hilmar Nov 9 '20 at 13:28
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    @smartButNotSavvy it sounds like the discussion you're having should be with your parents rather than your sibling. To me it would be fairer for them to assume some of the debt rather than your sibling, especially if your parents didn't even tell you about it until afterwards. – TTT Nov 9 '20 at 21:48

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