education loan default

Having given a Guarantee to an Educational loan, your Father has a bounden duty to clear the loan if the principal Borrower ie. your Nephew failed to do so. If the securities pledged by your father were already adjusted to the loan and still, if there is a loan balance, as a guarantor, your father has to make the payment till the entire loan is cleared.

You may advise your father to go to the Bank concerned and have a discussion with the Branch Manager giving a realistic and genuine one-time settlement proposal with a reasonable time frame. Normally banks permit such requests at their discretion.

In all this, where is your Nephew for whose education the loan was taken? Did he complete the studies and get a job in which case, why he is not paying the loan?