Millions of students planning to attend college in the fall are scrambling to find enough money to pay for their education. Financial aid and federal loans don’t always cover the staggeringly high cost of higher education.

To bridge the gap, many families take out private loans. That can be a big mistake, financial experts warn. Most private student loans require a cosigner — typically a parent — who must put their good credit on the line to get the loan approved.

Cosign a loan and you’re a co-borrower, but many parents don’t seem to understand that.

“It’s portrayed to them as if they’re going to simply be a reference or endorser, when the truth is they‘ll be obligated to pay this loan if something happens and the primary borrower can’t pay,” said Seth Frotman, Student Loan Ombudsman at the Consumer Financial Protection Bureau (CFPB). “We now see more and more cosigners going into retirement facing unprecedented levels of student debt.”

Survey Finds Real Risk of Financial Harm

A new report from LendEDU, a website that specializes in private student loans and student loan refinancing, quantifies the risk to cosigners. The survey of 500 parents who had cosigned student loans found that a third admitted they did not fully understand the potential consequences. Thirty-five percent said they now regret doing it.

About 57 percent of the cosigners said they believe their credit scores were negatively impacted as a result. And that makes sense, since cosigning a loan adds debt to your credit file, and that extra debt can lower your credit score.

More than a third (34 percent) said these lower credit scores hurt their ability to qualify for a mortgage, auto loan or other type of financing.

One-third of co-signers admitted they did not fully understand the potential consequences. Thirty-five percent said they now regret doing it.

The cosigner’s credit score will take another big hit if their child misses payments or pays late. Paying on time is one of the major factors used to determine credit scores. The LendEDU survey found that 34 percent of the parents said their children had made a late payment on that cosigned loan.

“There’s clearly a serious problem here,” said Nate Matherson, co-founder and CEO of LendEDU. “We found that many parents are hurting financially as a result of cosigning on private student loans. They need to understand the very real risks to them before they agree to cosign.”

Let our news meet your inbox. The news and stories that matters, delivered weekday mornings. This site is protected by recaptcha

According to the CFPB, many cosigners aren't clearly informed by lenders about the status of loans they're on the hook for, so parents may not know there's a problem until their credit score gets dinged or when they get denied for a loan.

An even more concerning finding: 51 percent of the parents surveyed felt their child’s student debt was putting their retirement in jeopardy. Fifty-eight percent said their kids had asked them to help make their monthly loan payments.

“It’s very possible that this generation of parents have or will have to put off retirement in order to mitigate the losses brought on by cosigning their children’s student loans,” the report concluded.

Lenders frequently advertise that the cosigner can get released from the loan after a certain number of payments have been made or certain payback thresholds are met. But that’s rarely the case. A CFPB report in 2015 found that 90 percent of the cosigners who applied for a release were rejected and did not get taken off the loan.

“We’ve seen a host of problems where cosigners will try to get off the loan, but run into roadblocks and pitfalls that prevent them for doing that,” the CFPB’s Frotman told NBC News.

Try to Find Other Ways to Pay

For some families, private student loans seem like the only way to finance their child’s college education. In many cases, there are options that can reduce the overall debt burden.

“Many parents cosign out of love, but don’t let your heart overrule your head,” said Rohit Chopra, senior fellow at the Consumer Federation of America. “I’m worried that too many parents feel that if they don’t cosign, they’re not helping their child. The private student loan industry wants you to think that, but you don’t have to do it.”

Chopra, until recently the Student Loan Ombudsman at the Consumer Financial Protection Bureau, advises families to compare financial aid offers. It may be possible to negotiate with the school’s financial aid office to get more assistance, but most parents don’t know that, he said.

“Students who do not qualify for enough federal student loans can often go to their financial aid office to see whether the school might be able to offer them other affordable loans,” Chopra told NBC News.

Mark Kantrowitz, a vice president at the college and scholarship search site Cappex.com, is not a big fan of private student loans. He cautions parents that by cosigning they are putting their financial future in the hands of a college student.

By cosigning a loan, you are putting your financial future in the hands of a college student.

“Unless that student is extremely responsible and you are capable of paying that loan in full, entirely on your own, you probably shouldn’t do it,” he said. “If the federal Stafford loans aren’t enough, there’s a good chance you are over-borrowing for the education and you should rethink whether you should go to that school. There are almost always going to be less-expensive options where you don’t have to take on as much debt.”

Kantrowitz suggests this rule of thumb: A student’s total debt at graduation should be less than their annual starting salary. His website, privatestudentloans.guru, has objective information and expert advice about these loans.

Another option that might work for some families is to see if the college or university offers a Tuition Installment Plan. With a TIP program, the tuition is divided into equal monthly payments. There’s no interest, just a small upfront fee. If you can afford the total cost, but simply can’t make a lump sum payment, TIP may be a way to pay for college that does not incur long-term debt.

The bottom line: Families need to do their homework and study their options before they choose to use private loans.

“Don’t just borrow with your heart; borrow with your head,” Chopra said.

The Consumer Financial Protection Bureau’s website has extensive advice on paying for college. Students or families who have problems with lenders can file a complaint online.

Herb Weisbaum is The ConsumerMan. Follow him on Facebook and Twitter or visit The ConsumerMan website.